Business News
Open Text Reports First Quarter Fiscal 2009 Financial Results
Tuesday 04. November 2008 - Open Text(TM) Corporation (NASDAQ:OTEX) (TSX: OTC), a leading provider of Enterprise Content Management (ECM) software, today announced unaudited financial results for its first quarter, ended September 30, 2008.(1)
Total revenue for the first quarter was $182.6 million, up 11% compared to $164.0 million for the same period in the prior fiscal year. License revenue in the first quarter was $50.1 million, up 13% compared to $44.3 million for the same period in the prior fiscal year.
Adjusted net income for the first quarter was $28.2 million or $0.53 per share on a diluted basis, up 28% compared to $22.1 million or $0.43 per share on a diluted basis, for the same period in the prior fiscal year. Net income for the first quarter, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), was $14.7 million or $0.28 per share on a diluted basis, compared to $7.8 million or $0.15 per share on a diluted basis, for the same period in the prior fiscal year.(2)
Total cash and cash equivalents as of September 30, 2008 was $250.1Â million compared to $150.3 million as of September 30, 2007.
“We are pleased with our results this quarter, driven by demand for our compliance solutions,” said John Shackleton, Chief Executive Officer of Open Text. “The business remains on-track, however, given the uncertainty in the global markets we feel it is important to act prudently and focus even more on our profit margins, so that we maintain our current earnings target for the year.”
On Friday October 31st, Captaris shareholders voted in favor of the merger of Captaris with a wholly-owned subsidiary of Open Text.
“With the acquisition of Captaris and as part of our commitment to meet our profit goals, we have re-examined our operations to ensure we have the right infrastructure going forward,” said Paul McFeeters, Chief Financial Officer of Open Text.
The combined company expects to reduce worldwide employment by approximately 10 percent. Functions impacted by the cuts include redundant positions or areas of the business that are not consistent with the company’s strategic focus. These activities will be reflected in a restructuring charge of approximately $20 million.
Please see note (2) below for a reconciliation of non-U.S. GAAP based financial measures used in this press release, to U.S. GAAP based financial measures.
Open Text Announces Normal Course Issuer Bid
The Company also announced its intention to make a Normal Course Issuer Bid (the “Bid”) through the facilities of the NASDAQ Global Select Market (“NASDAQ”). Pursuant to the Bid, Open Text proposes to repurchase, from time to time, until November 6, 2009, if considered advisable, up to an aggregate of 2,593,263 common shares.
Purchases over the NASDAQ could commence as early as November 10, 2008 if desirable. As of October 31, 2008, Open Text had 51,865,268 issued and outstanding common shares. The Board of Directors of Open Text believes that the proposed purchases are in the best interests of Open Text and are a desirable use of corporate funds. All common shares purchased by Open Text pursuant to the Bid will be cancelled. The Bid will expire on November 6, 2009.
The 2,593,263 common shares purchasable by Open Text under the Bid represent the maximum number of shares permitted to be purchased under applicable laws. This maximum is calculated as 5% of the outstanding securities of a class of securities of Open Text at the beginning of the Bid.