WATERLOO, ON, April 24, 2013 /CNW/ - Open Text(TM) Corporation (NASDAQ:OTEX) (TSX: OTC), announced today its financial
results for the third quarter ended March 31, 2013.
Financial Highlights for Q3 FY13 (1)
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Total revenue for the period was $337.7 million, up 16% Y/Y
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License revenue was $69.0 million, up 13% Y/Y
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Cloud services revenue was $44.4 million
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Non-GAAP-based EPS, diluted was $1.26 compared to $1.01 Y/Y, up 25% Y/Y;
GAAP-based EPS, diluted was $0.44 compared to $0.59 Y/Y (2)
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Non-GAAP-based income from operations was $90.4 million and 27% of
revenues; GAAP-based income from operations was $40.9 million and 12%
of revenues (2)
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Operating cash flow was $116.8 million compared to $96.6 million Y/Y, up
21% Y/Y, with an ending cash balance of $446.9 million.
"We are committed to delivering value to our stockholders through
technology innovation, strategic acquisitions and now through a
dividend," said OpenText CEO Mark J. Barrenechea. "We generated $333.1
million in operating cash flow over the last twelve months and we are
running our business at record operating margins. We have always been
committed to rewarding our stockholders' investments in OpenText and
the Board has decided that it is the right time to declare a dividend
for our stockholders."
Business Highlights
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Services, technology and consumer goods industries saw the most demand
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8 license transactions over $1 million and 13 license transactions
between $500K and $1 million
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Customer successes in the third quarter include Enbridge, The Planning
Inspectorate, Freescale, RS Components, Toray, Hydro Quebec, YPTO, CGI,
SSE plc, Volvo and Hoffmann-La Roche
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OpenText announces 7 new products: OpenText InfoFusion 1.0, StreamServe
5.6, OpenText SecureiX, Employee File Management (EFM) software for use
with SAP® solutions, OpenText Smart Process Applications, OpenText
Archive, OpenText Media Management 7.2
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OpenText acquires Resonate Knowledge Technologies
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OpenText appoints Kevin Cochrane as Chief Marketing Officer
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Gartner recognizes OpenText in Business Process Management suites report
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Independent research firm highlights OpenText's BPM capabilities
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OpenText honored as 2013 SAP® Pinnacle Award recipient
Dividend Program Highlights
The Company also announced today that it has adopted a policy to declare
non-cumulative quarterly dividends to holders of its common shares. The
Board of Directors has declared an initial dividend of $0.30 per share,
payable on June 21, 2013, to shareholders of the Company of record on
May 31, 2013.
The dividends to be paid on June 21, 2013 are designated as "eligible
dividends" for the purpose of section 89 of the Income Tax Act
(Canada).
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Summary of Quarterly Results
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Q3 FY13
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Q2 FY13
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Q3 FY12
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% Change (Q/Q)
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% Change (Y/Y)
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Revenue (million)
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$337.7
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$352.2
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$292.3
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(4.1)%
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15.5%
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GAAP-based gross margin
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64.2%
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65.2%
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63.6%
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(100)
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bps
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60
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bps
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GAAP-based operating income margin
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12.1%
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19.1%
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9.3%
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(700)
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bps
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280
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bps
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GAAP-based EPS, diluted
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$0.44
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$1.04
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$0.59
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(57.7)%
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(25.4)%
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Non-GAAP-based gross margin (2)
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71.2%
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71.8%
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71.0%
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(60)
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bps
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20
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bps
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Non-GAAP-based operating margin (2)
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26.8%
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32.1%
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25.2%
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(530)
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bps
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160
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bps
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Non-GAAP-based EPS, diluted (2)
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$1.26
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$1.58
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$1.01
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(20.3)%
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24.8%
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Summary of Year to Date Results
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Q3 FY13
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Q2 FY13
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Q3 FY12
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% Change
(Y/Y) (bps)
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Revenue (million)
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$1,016.1
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$678.4
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$901.8
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12.7%
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GAAP-based gross margin
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64.2%
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64.1%
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65.2%
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(100)
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bps
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GAAP-based operating income margin
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14.6%
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15.8%
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12.2%
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240
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bps
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GAAP-based EPS, diluted
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$1.80
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$1.37
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$2.00
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(10.0)%
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Non-GAAP-based gross margin (2)
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71.2%
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71.1%
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72.3%
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(110)
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bps
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Non-GAAP-based operating margin (2)
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29.2%
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30.5%
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27.2%
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200
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bps
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Non-GAAP-based EPS, diluted (2)
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$4.14
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$2.89
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$3.43
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20.7%
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Conference Call Information
The public is invited to listen to the earnings conference call at 5:00
p.m. ET (2:00 p.m. PT) by dialing 800-814-4859 (toll-free) or
416-644-3414 (international). Please dial-in 15 minutes ahead of time
to ensure proper connection. Alternatively, a live webcast of the
earnings conference call will be available on the Investor Relations
section of the Company's website at http://www.opentext.com/2/global/ex_event.html?evtype=events&id=701D0000000VqoUIAS.
An audio replay of the conference call will also be made available
approximately two hours after the conclusion of the call. The audio
replay will remain available until 11:59 p.m. on May 8, 2013 and can be
accessed by dialing 877-289-8525 (toll-free) or 416-640-1917
(international) and entering the confirmation code: 4610979 followed by
the number sign.
Please see below note (2) for a reconciliation of non-US GAAP- based
financial measures used in this press release, to US 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
financial conditions, and results of operations and earnings for Open
Text Corporation ("OpenText" or "the Company"), and declaration of
quarterly dividends, may contain words such as "could", "expects",
"may", "should", "will", "anticipates", "believes", "intends",
"estimates", "targets", "plans", "envisions", "seeks" and other similar
language and are considered forward-looking statements or information
under applicable securities laws. These statements are based on the
Company's current expectations, estimates, forecasts and projections
about the operating environment, economies and markets in which the
Company operates. These statements are subject to important
assumptions, risks and uncertainties that are difficult to predict, and
the actual outcome may be materially different. The Company's
assumptions, although considered reasonable by the Company at the date
of this press release, may prove to be inaccurate and consequently the
Company's actual results could differ materially from the expectations
set out herein.
Actual results or events could differ materially from those contemplated
in forward-looking statements as a result of the following: (i) the
future performance, financial and otherwise, of OpenText; (ii) the
ability of OpenText to bring new products to market and to increase
sales; (iii) the strength of the Company's product development
pipeline; (iv) the Company's growth and profitability prospects;
(v) the estimated size and growth prospects of the EIM market; (vi) the
Company's competitive position in the EIM market and its ability to
take advantage of future opportunities in this market; (vii) the
benefits of the Company's products to be realized by customers;
(viii) the demand for the Company's product and the extent of
deployment of the company's products in the EIM marketplace; and (ix)
the Company's financial condition and capital requirements.
Forward-looking statements may also include, without limitation, any
statement relating to future events, conditions or circumstances. The
risks and uncertainties that may affect forward-looking statements
include, but are not limited to: (i) integration of acquisitions and
related restructuring efforts, including the quantum of restructuring
charges and the timing thereof; (ii) the possibility that the Company
may be unable to meet its future reporting requirements under the
Securities Exchange Act of 1934, as amended, and the rules promulgated
there under; (iii) the risks associated with bringing new products to
market; (iv) fluctuations in currency exchange rates; (v) delays in the
purchasing decisions of the Company's customers; (vi) the competition
the Company faces in its industry and/or marketplace; (vii) the
possibility of technical, logistical or planning issues in connection
with the deployment of the Company's products or services; (viii) the
continuous commitment of the Company's customers; and (ix) demand for
the Company's products.
For additional information with respect to risks and other factors which
could occur, see the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other securities filings with the SEC and
other securities regulators. Unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligations to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Copyright ©2013 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)
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March 31, 2013
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June 30, 2012
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(unaudited)
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ASSETS
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Cash and cash equivalents
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$
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446,911
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$
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559,747
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Accounts receivable trade, net of allowance for doubtful accounts of
$5,858 as of March 31, 2013 and
$5,655 as of June 30, 2012
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174,563
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163,664
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Income taxes recoverable
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23,977
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17,849
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Prepaid expenses and other current assets
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47,787
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44,011
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Deferred tax assets
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15,727
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4,003
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Total current assets
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708,965
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789,274
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Property and equipment
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83,776
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81,157
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Goodwill
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1,241,960
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1,040,234
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Acquired intangible assets
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397,154
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312,563
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Deferred tax assets
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141,501
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115,128
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Other assets
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21,528
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23,739
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Deferred charges
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58,598
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68,653
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Long-term income taxes recoverable
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11,840
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13,545
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Total assets
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$
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2,665,322
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$
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2,444,293
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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199,501
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$
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131,734
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Current portion of long-term debt
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48,475
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41,374
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Deferred revenues
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297,130
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273,987
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Income taxes payable
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6,323
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|
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|
27,806
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Deferred tax liabilities
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1,188
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|
|
|
1,612
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Total current liabilities
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552,617
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476,513
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Long-term liabilities:
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Accrued liabilities
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19,109
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|
14,247
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Deferred credits
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|
12,232
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|
|
|
10,086
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Pension liability
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|
24,429
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|
|
|
22,074
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Long-term debt
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|
525,000
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|
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|
555,000
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Deferred revenues
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|
10,824
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|
|
|
12,653
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|
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Long-term income taxes payable
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|
151,643
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|
|
|
147,623
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|
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Deferred tax liabilities
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|
71,972
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|
|
|
26,705
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Total long-term liabilities
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815,209
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|
788,388
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Shareholders' equity:
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Share capital
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58,607,036 and 58,358,990 Common Shares issued and outstanding at
March 31,
2013 and June 30, 2012, respectively; Authorized Common Shares:
unlimited
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643,296
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|
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|
635,321
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|
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Additional paid-in capital
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|
96,159
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|
|
|
95,026
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Accumulated other comprehensive income
|
|
38,699
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|
|
|
44,364
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|
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Retained earnings
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|
548,416
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|
|
|
442,068
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|
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Treasury stock, at cost (610,878 and 793,494 shares at March 31, 2013
and at
June 30, 2012, respectively)
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(29,074)
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|
|
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(37,387)
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Total shareholders' equity
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|
1,297,496
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|
|
|
1,179,392
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Total liabilities and shareholders' equity
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$
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2,665,322
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|
|
$
|
2,444,293
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|
|
|
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OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)
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Three Months Ended
March 31,
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Nine Months Ended
March 31,
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2013
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2012
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2013
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2012
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Revenues:
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License
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$
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69,035
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$
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60,957
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$
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200,816
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$
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215,688
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Cloud Services
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44,437
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|
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|
—
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135,472
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—
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Customer support
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|
166,573
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|
|
|
166,057
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|
|
|
493,327
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|
|
|
493,440
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Professional service and other
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|
|
57,650
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|
|
|
65,333
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|
|
|
186,454
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|
|
|
192,721
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|
|
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Total revenues
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|
|
337,695
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|
|
292,347
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|
|
|
1,016,069
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|
|
|
901,849
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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License
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3,079
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|
|
|
4,549
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|
|
|
12,578
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|
|
|
13,917
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|
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Cloud services
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|
18,891
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|
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|
—
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|
|
55,435
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|
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—
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Customer support
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|
|
27,497
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|
|
|
27,987
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|
|
|
81,597
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|
|
|
82,724
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|
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Professional service and other
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|
|
48,252
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|
|
|
52,596
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|
|
|
144,498
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|
|
|
153,551
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|
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Amortization of acquired technology-based intangible assets
|
|
|
23,058
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|
|
|
21,264
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|
|
|
70,031
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|
|
|
63,307
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|
|
|
Total cost of revenues
|
|
|
120,777
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|
|
|
106,396
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|
|
|
364,139
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|
|
|
313,499
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|
Gross profit
|
|
|
216,918
|
|
|
|
185,951
|
|
|
|
651,930
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|
|
|
588,350
|
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Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Research and development
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|
|
43,003
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|
|
|
41,738
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|
|
|
121,627
|
|
|
|
127,848
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|
|
Sales and marketing
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|
|
77,327
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|
|
|
69,572
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|
|
|
209,819
|
|
|
|
202,903
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|
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General and administrative
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|
|
27,061
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|
|
|
21,999
|
|
|
|
85,199
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|
|
|
72,886
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|
|
Depreciation
|
|
|
6,064
|
|
|
|
5,427
|
|
|
|
18,278
|
|
|
|
16,319
|
|
|
Amortization of acquired customer-based intangible assets
|
|
|
17,149
|
|
|
|
13,462
|
|
|
|
51,548
|
|
|
|
39,948
|
|
|
Special charges
|
|
|
5,444
|
|
|
|
6,450
|
|
|
|
17,267
|
|
|
|
18,776
|
|
|
|
Total operating expenses
|
|
|
176,048
|
|
|
|
158,648
|
|
|
|
503,738
|
|
|
|
478,680
|
|
Income from operations
|
|
|
40,870
|
|
|
|
27,303
|
|
|
|
148,192
|
|
|
|
109,670
|
|
Other income (expense), net
|
|
|
237
|
|
|
|
(1,804)
|
|
|
|
1,707
|
|
|
|
10,145
|
|
Interest expense, net
|
|
|
(4,109)
|
|
|
|
(4,761)
|
|
|
|
(12,992)
|
|
|
|
(11,154)
|
|
Income before income taxes
|
|
|
36,998
|
|
|
|
20,738
|
|
|
|
136,907
|
|
|
|
108,661
|
|
Provision for (recovery of) income taxes
|
|
|
11,187
|
|
|
|
(14,036)
|
|
|
|
30,559
|
|
|
|
(8,542)
|
|
Net income for the period
|
|
$
|
25,811
|
|
|
$
|
34,774
|
|
|
$
|
106,348
|
|
|
$
|
117,203
|
|
Earnings per share—basic
|
|
$
|
0.44
|
|
|
$
|
0.60
|
|
|
$
|
1.82
|
|
|
$
|
2.03
|
|
Earnings per share—diluted
|
|
$
|
0.44
|
|
|
$
|
0.59
|
|
|
$
|
1.80
|
|
|
$
|
2.00
|
|
Weighted average number of Common Shares outstanding—basic
|
|
|
58,596
|
|
|
|
58,038
|
|
|
|
58,514
|
|
|
|
57,765
|
|
Weighted average number of Common Shares outstanding—diluted
|
|
|
59,077
|
|
|
|
58,821
|
|
|
|
59,001
|
|
|
|
58,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Net income for the period
|
|
|
$
|
25,811
|
|
|
$
|
34,774
|
|
|
$
|
106,348
|
|
|
$
|
117,203
|
|
Other comprehensive income—net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign currency translation adjustments
|
|
|
|
(3,325)
|
|
|
|
845
|
|
|
|
(4,790)
|
|
|
|
(11,127)
|
|
|
Net unrealized gain (loss) on cash flow hedges
|
|
|
|
(833)
|
|
|
|
1,738
|
|
|
|
(342)
|
|
|
|
(332)
|
|
|
Net actuarial gain (loss) relating to defined benefit pension plans
|
|
|
|
196
|
|
|
|
(3,316)
|
|
|
|
(533)
|
|
|
|
(3,522)
|
|
Total other comprehensive income (loss), net, for the period
|
|
|
$
|
(3,962)
|
|
|
$
|
(733)
|
|
|
$
|
(5,665)
|
|
|
$
|
(14,981)
|
|
Total comprehensive income
|
|
|
$
|
21,849
|
|
|
$
|
34,041
|
|
|
$
|
100,683
|
|
|
$
|
102,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPEN TEXT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
|
$
|
25,811
|
|
|
$
|
34,774
|
|
|
$
|
106,348
|
|
|
$
|
117,203
|
|
Adjustments to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets
|
|
|
|
46,271
|
|
|
|
40,153
|
|
|
|
139,857
|
|
|
|
119,574
|
|
|
Share-based compensation expense
|
|
|
|
3,877
|
|
|
|
5,165
|
|
|
|
10,153
|
|
|
|
13,406
|
|
|
Excess tax benefits on share-based compensation expense
|
|
|
|
(1)
|
|
|
|
(2,215)
|
|
|
|
(612)
|
|
|
|
(2,710)
|
|
|
Pension expense
|
|
|
|
222
|
|
|
|
171
|
|
|
|
692
|
|
|
|
477
|
|
|
Amortization of debt issuance costs
|
|
|
|
519
|
|
|
|
588
|
|
|
|
1,591
|
|
|
|
1,166
|
|
|
Amortization of deferred charges and credits
|
|
|
|
2,762
|
|
|
|
3,078
|
|
|
|
8,620
|
|
|
|
8,457
|
|
|
Loss on sale and write down of property and equipment
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24
|
|
|
|
203
|
|
|
Deferred taxes
|
|
|
|
(6,210)
|
|
|
|
(14,134)
|
|
|
|
(7,362)
|
|
|
|
(21,092)
|
|
|
Impairment and other non cash charges
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,345
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(5,019)
|
|
|
|
(9,237)
|
|
|
|
15,387
|
|
|
|
(9,264)
|
|
|
Prepaid expenses and other current assets
|
|
|
|
(3,445)
|
|
|
|
(11,148)
|
|
|
|
(2,061)
|
|
|
|
(3,107)
|
|
|
Income taxes
|
|
|
|
(1,019)
|
|
|
|
(3,833)
|
|
|
|
(14,907)
|
|
|
|
(950)
|
|
|
Deferred charges and credits
|
|
|
|
4,016
|
|
|
|
(9,425)
|
|
|
|
3,580
|
|
|
|
(24,078)
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
(6,556)
|
|
|
|
(4,553)
|
|
|
|
(27,176)
|
|
|
|
(21,352)
|
|
|
Deferred revenue
|
|
|
|
54,930
|
|
|
|
66,303
|
|
|
|
18,192
|
|
|
|
8,497
|
|
|
Other assets
|
|
|
|
670
|
|
|
|
911
|
|
|
|
959
|
|
|
|
(1,131)
|
|
Net cash provided by operating activities
|
|
|
|
116,828
|
|
|
|
96,598
|
|
|
|
253,285
|
|
|
|
186,644
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions of property and equipment
|
|
|
|
(5,875)
|
|
|
|
(4,694)
|
|
|
|
(15,792)
|
|
|
|
(21,381)
|
|
|
Purchase of patents
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(193)
|
|
|
Purchase of System Solutions Australia Pty Limited, net of cash acquired
|
|
|
|
—
|
|
|
|
(214)
|
|
|
|
(516)
|
|
|
|
(1,738)
|
|
|
Purchase of Operitel Corporation, net of cash acquired
|
|
|
|
—
|
|
|
|
(131)
|
|
|
|
—
|
|
|
|
(6,391)
|
|
|
Purchase of Global 360 Holding Corp., net of cash acquired
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(245,653)
|
|
|
Purchase of EasyLink Services International Corporation, net of cash
acquired
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(315,331)
|
|
|
|
—
|
|
|
Purchase of Resonate KT Limited, net of cash acquired
|
|
|
|
(19,366)
|
|
|
|
—
|
|
|
|
(19,366)
|
|
|
|
—
|
|
|
Purchase consideration for prior period acquisitions
|
|
|
|
(222)
|
|
|
|
(317)
|
|
|
|
(653)
|
|
|
|
(926)
|
|
Net cash used in investing activities
|
|
|
|
(25,463)
|
|
|
|
(5,356)
|
|
|
|
(351,658)
|
|
|
|
(276,282)
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess tax benefits on share-based compensation expense
|
|
|
|
1
|
|
|
|
2,215
|
|
|
|
612
|
|
|
|
2,710
|
|
|
Proceeds from issuance of Common Shares
|
|
|
|
1,128
|
|
|
|
7,075
|
|
|
|
7,530
|
|
|
|
18,336
|
|
|
Proceeds from long-term debt and revolver
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
648,500
|
|
|
Repayment of long-term debt and revolver
|
|
|
|
(7,670)
|
|
|
|
(7,664)
|
|
|
|
(23,008)
|
|
|
|
(341,520)
|
|
|
Debt issuance costs
|
|
|
|
—
|
|
|
|
(525)
|
|
|
|
—
|
|
|
|
(9,834)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(6,541)
|
|
|
|
1,101
|
|
|
|
(14,866)
|
|
|
|
318,192
|
|
Foreign exchange gain (loss) on cash held in foreign currencies
|
|
|
|
(5,171)
|
|
|
|
2,652
|
|
|
|
403
|
|
|
|
(3,788)
|
|
Increase (decrease) in cash and cash equivalents during the period
|
|
|
|
79,653
|
|
|
|
94,995
|
|
|
|
(112,836)
|
|
|
|
224,766
|
|
Cash and cash equivalents at beginning of the period
|
|
|
|
367,258
|
|
|
|
413,911
|
|
|
|
559,747
|
|
|
|
284,140
|
|
Cash and cash equivalents at end of the period
|
|
|
$
|
446,911
|
|
|
$
|
508,906
|
|
|
$
|
446,911
|
|
|
$
|
508,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 US GAAP, the Company provides certain
non-US GAAP financial measures that are not in accordance with US GAAP.
These non-US GAAP financial measures have certain limitations in that
they do not have a standardized meaning and thus the Company's
definition may be different from similar non-US GAAP financial measures
used by other companies and/or analysts and may differ from period to
period. Thus it may be more difficult to compare the Company's
financial performance to that of other companies. However, the
Company's management compensates for these limitations by providing the
relevant disclosure of the items excluded in the calculation of non-US
GAAP net income and non-US GAAP EPS both in its reconciliation to the
US GAAP financial measures of net income and EPS and its consolidated
financial statements, all of which should be considered when evaluating
the Company's results. The Company uses the financial measures non-US
GAAP EPS and non-US GAAP net income to supplement the information
provided in its consolidated financial statements, which are presented
in accordance with US GAAP. The presentation of non-US GAAP net income
and non-US GAAP EPS is not meant to be a substitute for net income or
net income per share presented in accordance with US GAAP, but rather
should be evaluated in conjunction with and as a supplement to such
US 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
US GAAP measures with certain non-US GAAP measures for the reasons set
forth below. Non-US GAAP net income and non-US GAAP EPS are calculated
as net income or net income per share on a diluted basis, excluding,
where applicable, the amortization of acquired intangible assets, other
income (expense), share-based compensation, and restructuring, all net
of tax. The Company's management believes that the presentation of
non-US GAAP net income and non-US GAAP EPS provides useful information
to investors because it excludes non-operational charges. The use of
the term "non-operational charge" is defined by the Company as those
that do not impact 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, such as amortization of acquired
intangible assets, restructuring costs, 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 US GAAP. The Company believes the provision of
supplemental non-US GAAP measures allows 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 Open Text's performance or expected
performance of future operations and facilitates period-to-period
comparison of operating performance. As a result, the Company considers
it appropriate and reasonable to provide, in addition to US GAAP
measures, supplementary non-US 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 US GAAP
based financial measures to non-US 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 March 31, 2013.
($ in thousands except for per share amounts)
|
|
|
|
Three Months Ended
March 31, 2013
|
|
|
|
|
GAAP-based
Measures
|
|
|
Adjustments
|
|
|
Note
|
|
|
Non-GAAP-based
Measures
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud services
|
|
|
|
18,891
|
|
|
|
(50)
|
|
|
(1)
|
|
|
|
18,841
|
|
Customer Support
|
|
|
|
27,497
|
|
|
|
(130)
|
|
|
(1)
|
|
|
|
27,367
|
|
Professional Service and Other
|
|
|
|
48,252
|
|
|
|
(295)
|
|
|
(1)
|
|
|
|
47,957
|
|
Amortization of acquired technology-based intangible assets
|
|
|
|
23,058
|
|
|
|
(23,058)
|
|
|
(2)
|
|
|
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
|
|
|
216,918
|
|
|
|
23,533
|
|
|
|
|
|
|
240,451
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
43,003
|
|
|
|
(498)
|
|
|
(1)
|
|
|
|
42,505
|
|
Sales and marketing
|
|
|
|
77,327
|
|
|
|
(2,634)
|
|
|
(1)
|
|
|
|
74,693
|
|
General and administrative
|
|
|
|
27,061
|
|
|
|
(270)
|
|
|
(1)
|
|
|
|
26,791
|
|
Amortization of acquired customer-based intangible assets
|
|
|
|
17,149
|
|
|
|
(17,149)
|
|
|
(2)
|
|
|
|
—
|
|
Special charges
|
|
|
|
5,444
|
|
|
|
(5,444)
|
|
|
(3)
|
|
|
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
|
|
|
40,870
|
|
|
|
49,528
|
|
|
|
|
|
|
90,398
|
|
Other income (expense), net
|
|
|
|
237
|
|
|
|
(237)
|
|
|
(4)
|
|
|
|
—
|
|
Provision for income taxes
|
|
|
|
11,187
|
|
|
|
893
|
|
|
(5)
|
|
|
|
12,080
|
|
GAAP-based net income / Non-GAAP-based net income
|
|
|
|
25,811
|
|
|
|
48,398
|
|
|
(6)
|
|
|
|
74,209
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
|
|
$
|
0.44
|
|
|
$
|
0.82
|
|
|
(6)
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Adjustment relates to the exclusion of share based compensation expense
from our non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
|
|
(2)
|
|
Adjustment relates to the exclusion of amortization expense from our
non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
|
|
(3)
|
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
|
Adjustment relates to differences between the GAAP-based tax provision
of approximately 30% and a non-GAAP-based tax rate of 14%; these rate
differences are due to the income tax effects of expenses that are
excluded for the purpose of calculating non-GAAP-based adjusted net
income.
|
|
(6)
|
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
|
|
|
$
|
74,209
|
|
|
$
|
1.26
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
40,207
|
|
|
|
0.68
|
|
Share-based compensation
|
|
|
|
|
3,877
|
|
|
|
0.07
|
|
Special charges
|
|
|
|
|
5,444
|
|
|
|
0.09
|
|
Other (income) expense, net
|
|
|
|
|
(237)
|
|
|
|
—
|
|
GAAP-based provision for income taxes
|
|
|
|
|
11,187
|
|
|
|
0.19
|
|
Non-GAAP-based provision for income taxes
|
|
|
|
|
(12,080)
|
|
|
|
(0.21)
|
|
GAAP-based net income
|
|
|
|
$
|
25,811
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of selected GAAP-based measures to Non-GAAP based
measures for the nine months ended March 31, 2013.
($ in thousands except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2013
|
|
|
|
|
|
GAAP-based
Measures
|
|
|
Adjustments
|
|
|
Note
|
|
|
Non-GAAP-based
Measures
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud services
|
|
|
|
|
55,435
|
|
|
|
(80)
|
|
|
(1)
|
|
|
|
55,355
|
|
Customer Support
|
|
|
|
|
81,597
|
|
|
|
(275)
|
|
|
(1)
|
|
|
|
81,322
|
|
Professional Service and Other
|
|
|
|
|
144,498
|
|
|
|
(660)
|
|
|
(1)
|
|
|
|
143,838
|
|
Amortization of acquired technology-based intangible assets
|
|
|
|
|
70,031
|
|
|
|
(70,031)
|
|
|
(2)
|
|
|
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
|
|
|
|
651,930
|
|
|
|
71,046
|
|
|
|
|
|
|
722,976
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
121,627
|
|
|
|
(1,167)
|
|
|
(1)
|
|
|
|
120,460
|
|
Sales and marketing
|
|
|
|
|
209,819
|
|
|
|
(5,953)
|
|
|
(1)
|
|
|
|
203,866
|
|
General and administrative
|
|
|
|
|
85,199
|
|
|
|
(2,018)
|
|
|
(1)
|
|
|
|
83,181
|
|
Amortization of acquired customer-based intangible assets
|
|
|
|
|
51,548
|
|
|
|
(51,548)
|
|
|
(2)
|
|
|
|
—
|
|
Special charges
|
|
|
|
|
17,267
|
|
|
|
(17,267)
|
|
|
(3)
|
|
|
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
|
|
|
|
148,192
|
|
|
|
148,999
|
|
|
|
|
|
|
297,191
|
|
Other income (expense), net
|
|
|
|
|
1,707
|
|
|
|
(1,707)
|
|
|
(4)
|
|
|
|
—
|
|
Provision for income taxes
|
|
|
|
|
30,559
|
|
|
|
9,229
|
|
|
(5)
|
|
|
|
39,788
|
|
GAAP-based net income / Non-GAAP-based net income
|
|
|
|
|
106,348
|
|
|
|
138,063
|
|
|
(6)
|
|
|
|
244,411
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
|
|
|
$
|
1.80
|
|
|
$
|
2.34
|
|
|
(6)
|
|
|
$
|
4.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Adjustment relates to the exclusion of share based compensation expense
from our non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
|
|
(2)
|
|
Adjustment relates to the exclusion of amortization expense from our
non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
|
|
(3)
|
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
|
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.
|
|
(6)
|
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
|
|
|
$
|
244,411
|
|
$
|
4.14
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
121,579
|
|
|
2.06
|
|
Share-based compensation
|
|
|
|
|
10,153
|
|
|
0.17
|
|
Special charges
|
|
|
|
|
17,267
|
|
|
0.29
|
|
Other (income) expense, net
|
|
|
|
|
(1,707)
|
|
|
(0.03)
|
|
GAAP-based provision for income taxes
|
|
|
|
|
30,559
|
|
|
0.52
|
|
Non-GAAP-based provision for income taxes
|
|
|
|
|
(39,788)
|
|
|
(0.67)
|
|
GAAP-based net income
|
|
|
|
$
|
106,348
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of selected GAAP-based measures to Non-GAAP based
measures for the three months ended December 31, 2012.
($ in thousands except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2012
|
|
|
|
|
|
GAAP-based
Measures
|
|
|
Adjustments
|
|
|
Note
|
|
|
|
Non-GAAP-based
Measures
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud services
|
|
|
|
|
18,261
|
|
|
|
(30)
|
|
|
(1)
|
|
|
|
18,231
|
|
Customer Support
|
|
|
|
|
28,277
|
|
|
|
(107)
|
|
|
(1)
|
|
|
|
28,170
|
|
Professional Service and Other
|
|
|
|
|
47,664
|
|
|
|
(188)
|
|
|
(1)
|
|
|
|
47,476
|
|
Amortization of acquired technology-based intangible assets
|
|
|
|
|
23,191
|
|
|
|
(23,191)
|
|
|
(2)
|
|
|
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
|
|
|
|
229,456
|
|
|
|
23,516
|
|
|
|
|
|
|
252,972
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
38,718
|
|
|
|
(331)
|
|
|
(1)
|
|
|
|
38,387
|
|
Sales and marketing
|
|
|
|
|
67,977
|
|
|
|
(1,653)
|
|
|
(1)
|
|
|
|
66,324
|
|
General and administrative
|
|
|
|
|
30,005
|
|
|
|
(865)
|
|
|
(1)
|
|
|
|
29,140
|
|
Amortization of acquired customer-based intangible assets
|
|
|
|
|
17,147
|
|
|
|
(17,147)
|
|
|
(2)
|
|
|
|
—
|
|
Special charges
|
|
|
|
|
2,269
|
|
|
|
(2,269)
|
|
|
(3)
|
|
|
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
|
|
|
|
67,235
|
|
|
|
45,781
|
|
|
|
|
|
|
113,016
|
|
Other income (expense), net
|
|
|
|
|
1,541
|
|
|
|
(1,541)
|
|
|
(4)
|
|
|
|
—
|
|
Provision for income taxes
|
|
|
|
|
3,153
|
|
|
|
12,037
|
|
|
(5)
|
|
|
|
15,190
|
|
GAAP-based net income / Non-GAAP-based net income
|
|
|
|
|
61,108
|
|
|
|
32,203
|
|
|
(6)
|
|
|
|
93,311
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
|
|
|
$
|
1.04
|
|
|
$
|
0.54
|
|
|
(6)
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
|
Adjustment relates to differences between the GAAP-based tax provision
of approximately 5% 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.
|
|
(6)
|
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2012
|
|
|
|
|
|
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
|
|
|
$
|
93,311
|
|
|
$
|
1.58
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
|
|
40,338
|
|
|
|
0.68
|
|
Share-based compensation
|
|
|
|
|
3,174
|
|
|
|
0.05
|
|
Special charges
|
|
|
|
|
2,269
|
|
|
|
0.04
|
|
Other (income) expense, net
|
|
|
|
|
(1,541)
|
|
|
|
(0.03)
|
|
GAAP-based provision for income taxes
|
|
|
|
|
3,153
|
|
|
|
0.05
|
|
Non-GAAP-based provision for income taxes
|
|
|
|
|
(15,190)
|
|
|
|
(0.25)
|
|
GAAP-based net income
|
|
|
|
$
|
61,108
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of selected GAAP-based measures to Non-GAAP based
measures for the six months ended December 31, 2012.
($ in thousands except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31, 2012
|
|
|
|
|
|
GAAP-based
Measures
|
|
|
Adjustments
|
|
|
Note
|
|
|
Non-GAAP-based
Measures
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud services
|
|
|
|
|
36,544
|
|
|
|
(30)
|
|
|
(1)
|
|
|
|
36,514
|
|
Customer Support
|
|
|
|
|
54,100
|
|
|
|
(145)
|
|
|
(1)
|
|
|
|
53,955
|
|
Professional Service and Other
|
|
|
|
|
96,246
|
|
|
|
(365)
|
|
|
(1)
|
|
|
|
95,881
|
|
Amortization of acquired technology-based intangible assets
|
|
|
|
|
46,973
|
|
|
|
(46,973)
|
|
|
(2)
|
|
|
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
|
|
|
|
435,012
|
|
|
|
47,513
|
|
|
|
|
|
|
482,525
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
78,624
|
|
|
|
(669)
|
|
|
(1)
|
|
|
|
77,955
|
|
Sales and marketing
|
|
|
|
|
132,492
|
|
|
|
(3,319)
|
|
|
(1)
|
|
|
|
129,173
|
|
General and administrative
|
|
|
|
|
58,138
|
|
|
|
(1,748)
|
|
|
(1)
|
|
|
|
56,390
|
|
Amortization of acquired customer-based intangible assets
|
|
|
|
|
34,399
|
|
|
|
(34,399)
|
|
|
(2)
|
|
|
|
—
|
|
Special charges
|
|
|
|
|
11,823
|
|
|
|
(11,823)
|
|
|
(3)
|
|
|
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
|
|
|
|
107,322
|
|
|
|
99,471
|
|
|
|
|
|
|
206,793
|
|
Other income (expense), net
|
|
|
|
|
1,470
|
|
|
|
(1,470)
|
|
|
(4)
|
|
|
|
—
|
|
Provision for income taxes
|
|
|
|
|
19,372
|
|
|
|
8,335
|
|
|
(5)
|
|
|
|
27,707
|
|
GAAP-based net income / Non-GAAP-based net income
|
|
|
|
|
80,537
|
|
|
|
89,666
|
|
|
(6)
|
|
|
|
170,203
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
|
|
|
$
|
1.37
|
|
|
$
|
1.52
|
|
|
(6)
|
|
|
$
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
|
Adjustment relates to differences between the GAAP-based tax provision
of approximately 19% 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.
|
|
(6)
|
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
|
|
|
|
Six Months Ended
December 31, 2012
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
$
|
170,203
|
$
|
2.89
|
|
Less:
|
|
|
|
Amortization
|
81,372
|
1.38
|
|
Share-based compensation
|
6,276
|
0.11
|
|
Special charges
|
11,823
|
0.20
|
|
Other (income) expense, net
|
(1,470)
|
(0.02)
|
|
GAAP-based provision for income taxes
|
19,372
|
0.33
|
|
Non-GAAP-based provision for income taxes
|
(27,707)
|
(0.48)
|
|
GAAP-based net income
|
$
|
80,537
|
$
|
1.37
|
Reconciliation of selected GAAP-based measures to Non GAAP-based
measures for the three months ended March 31, 2012.
($ in thousands except for per share amounts)
|
|
|
|
Three Months Ended
March 31, 2012
|
|
|
GAAP-based
measures
|
Adjustments
|
Note
|
Non-GAAP-based
measures
|
|
Cost of Revenues:
|
|
|
|
|
|
Customer Support
|
27,987
|
(53)
|
(1)
|
27,934
|
|
Professional Service and Other
|
52,596
|
(203)
|
(1)
|
52,393
|
|
Amortization of acquired technology-based intangible assets
|
21,264
|
(21,264)
|
(2)
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
185,951
|
21,520
|
|
207,471
|
|
Operating Expenses
|
|
|
|
|
Research and development
|
41,738
|
(1,028)
|
(1)
|
40,710
|
|
Sales and marketing
|
69,572
|
(2,594)
|
(1)
|
66,978
|
|
General and administrative
|
21,999
|
(1,287)
|
(1)
|
20,712
|
|
Amortization of acquired customer-based intangible assets
|
13,462
|
(13,462)
|
(2)
|
—
|
|
Special charges
|
6,450
|
(6,450)
|
(3)
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
27,303
|
46,341
|
|
73,644
|
|
Other income (expense), net
|
(1,804)
|
1,804
|
(4)
|
—
|
|
Provision for (recovery of) income taxes
|
(14,036)
|
23,680
|
(5)
|
9,644
|
|
GAAP-based net income / Non-GAAP-based net income
|
34,774
|
24,465
|
(6)
|
59,239
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
$
|
0.59
|
$
|
0.42
|
(6)
|
$
|
1.01
|
|
(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)
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
Adjustment relates to differences between the GAAP-based tax recovery of
approximately 68% 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.
|
|
(6)
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
Three Months Ended
March 31, 2012
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
$
|
59,239
|
$
|
1.01
|
|
Less:
|
|
|
|
Amortization
|
34,726
|
0.59
|
|
Share-based compensation
|
5,165
|
0.09
|
|
Special charges
|
6,450
|
0.11
|
|
Other (income) expense, net
|
1,804
|
0.03
|
|
GAAP-based provision for (recovery of) income taxes
|
(14,036)
|
(0.24)
|
|
Non-GAAP-based provision for income taxes
|
(9,644)
|
(0.16)
|
|
GAAP-based net income
|
$
|
34,774
|
$
|
0.59
|
Reconciliation of selected GAAP-based measures to Non GAAP-based
measures for the nine months ended March 31, 2012.
($ in thousands except for per share amounts)
|
|
|
|
Nine Months Ended
March 31, 2012
|
|
|
GAAP-based
measures
|
Adjustments
|
Note
|
Non-GAAP-based
measures
|
|
Cost of Revenues:
|
|
|
|
|
|
Customer Support
|
82,724
|
(112)
|
(1)
|
82,612
|
|
Professional Service and Other
|
153,551
|
(408)
|
(1)
|
153,143
|
|
Amortization of acquired technology-based intangible assets
|
63,307
|
(63,307)
|
(2)
|
—
|
|
GAAP-based gross profit/ Non-GAAP-based gross profit
|
588,350
|
63,827
|
|
652,177
|
|
Operating Expenses
|
|
|
|
|
Research and development
|
127,848
|
(2,872)
|
(1)
|
124,976
|
|
Sales and marketing
|
202,903
|
(6,040)
|
(1)
|
196,863
|
|
General and administrative
|
72,886
|
(3,974)
|
(1)
|
68,912
|
|
Amortization of acquired customer-based intangible assets
|
39,948
|
(39,948)
|
(2)
|
—
|
|
Special charges
|
18,776
|
(18,776)
|
(3)
|
—
|
|
GAAP-based income from operations / Non-GAAP-based income from
operations
|
109,670
|
135,437
|
|
245,107
|
|
Other income (expense), net
|
10,145
|
(10,145)
|
(4)
|
—
|
|
Provision for (recovery of) income taxes
|
(8,542)
|
41,295
|
(5)
|
32,753
|
|
GAAP-based net income / Non-GAAP-based net income
|
117,203
|
83,997
|
(6)
|
201,200
|
|
GAAP-based earnings per share / Non-GAAP-based earnings per
share-diluted
|
$
|
2.00
|
$
|
1.43
|
(6)
|
$
|
3.43
|
|
(1)
|
Adjustment relates to the exclusion of share based compensation expense
from our non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
|
|
(2)
|
Adjustment relates to the exclusion of amortization expense from our
non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
|
|
(3)
|
Adjustment relates to the exclusion of Special charges from our
non-GAAP-based operating expenses as Special charges are generally
incurred in the aftermath of acquisitions and are not indicative or
related to continuing operations and are hence excluded from our
internal analysis of operating results.
|
|
(4)
|
Adjustment relates to the exclusion of Other income (expense) from our
non-GAAP-based operating expenses as Other income (expense) relates
primarily to the transactional impact of foreign exchange and are
generally not indicative or related to continuing operations and are
hence excluded from our internal analysis of operating results.
|
|
(5)
|
Adjustment relates to differences between the GAAP-based tax recovery of
approximately 8% 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.
|
|
(6)
|
Reconciliation of non-GAAP-based adjusted net income to GAAP-based net
income:
|
|
|
Nine Months Ended
March 31, 2012
|
|
|
|
Per share
|
|
Non-GAAP-based net income
|
$
|
201,200
|
$
|
3.43
|
|
Less:
|
|
|
|
Amortization
|
103,255
|
1.76
|
|
Share-based compensation
|
13,406
|
0.23
|
|
Special charges
|
18,776
|
0.32
|
|
Other (income) expense, net
|
(10,145)
|
(0.17)
|
|
GAAP-based provision for (recovery of) income taxes
|
(8,542)
|
(0.15)
|
|
Non-GAAP-based provision for income taxes
|
(32,753)
|
(0.56)
|
|
GAAP-based net income
|
$
|
117,203
|
$
|
2.00
|
(3) The following table provides a composition of our major currencies
for revenue and expenses, expressed as a percentage, for the three and
nine months ended March 31, 2013:
|
|
Three Months Ended
March 31, 2013
|
|
Currencies
|
% of Revenue
|
% of Expenses*
|
|
EURO
|
29 %
|
17 %
|
|
GBP
|
8 %
|
8 %
|
|
CAD
|
6 %
|
19 %
|
|
USD
|
47 %
|
42 %
|
|
Other
|
10 %
|
14 %
|
|
Total
|
100 %
|
100 %
|
|
|
Nine Months Ended
March 31, 2013
|
|
Currencies
|
% of Revenue
|
% of Expenses*
|
|
EURO
|
26 %
|
17 %
|
|
GBP
|
8 %
|
8 %
|
|
CAD
|
6 %
|
18 %
|
|
USD
|
49 %
|
43 %
|
|
Other
|
11 %
|
14 %
|
|
Total
|
100 %
|
100 %
|
*Expenses include all cost of revenues and operating expenses included
within the Consolidated Statements of Income, except for amortization
of intangible assets, share-based compensation and Special charges.
SOURCE: Open Text Corporation
