OpenText Reports First Quarter Fiscal Year 2012 Financial Results

28 October 2011

Open Text Corporation today announced financial results for its first quarter ended September 30, 2011.Total revenue for the first quarter of fiscal 2012 was $288.0 million, up 32.5% compared to $217.4 million for the same period in the prior fiscal year. License revenue for the first quarter of fiscal 2012 was $65.0 million, up 52.5% compared to $42.6 million for the same period in the prior fiscal year.

Adjusted net income for the first quarter of fiscal 2012 was $59.0 million or $1.01 per share on a diluted basis, up 18.0% compared to $50.0 million or $0.86 per share on a diluted basis for the same period in the prior fiscal year. Net income in accordance with U.S. generally accepted accounting principles ("US GAAP") was $35.0 million or $0.60 per share on a diluted basis, compared to $21.7 million or $0.37 per share on a diluted basis for the same period in the prior fiscal year.The cash and cash equivalents balance as of September 30, 2011 was $119.3 million.

Accounts receivable as of September 30, 2011 totaled $143.8 million, compared to $154.6 million as of June 30, 2011 and Days Sales Outstanding (DSO) was 45 days in the first quarter of fiscal 2012, compared to 43 days in the first quarter of fiscal 2011. “With strong sales globally and particular strength in emerging markets, I am pleased with our performance in the first quarter,” said John Shackleton, President and Chief Executive Officer, Open Text. “As we address an even larger global market, we continue to win new business with the breadth of functionality in our integrated ECM Suite.” Please see note (2) below for a reconciliation of non-US GAAP based financial measures used in this press release, to US GAAP based financial measures.


1. Based on comparison of historical revenue figures publicly disseminated by companies in the Enterprise Content Management (“ECM”) sector. All dollar amounts in this press release are in US Dollars unless otherwise indicated.

2. Use of US 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 standardised 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 adjusted net income and adjusted 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

3. Company’s results

The Company uses the financial measures adjusted EPS and adjusted net income to supplement the information provided in its consolidated financial statements, which are presented in accordance with US GAAP. The
presentation of adjusted net income and adjusted 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. Adjusted net income and adjusted EPS re calculated as net income or net income per share on a diluted basis, excluding, where applicable, the amortisation 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 adjusted net income and adjusted 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 amortisation 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 OpenText's performance or expected performance of recurring 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.

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