Open Text Reports Third Quarter Fiscal Year 2013 Financial Results and Announces Quarterly Dividend Program

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)

• Total revenue for the period was $337.7 million, up 16% Y/Y
• License revenue was $69.0 million, up 13% Y/Y
• Cloud services revenue was $44.4 million
• 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₎
• 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₎
• 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

• Services, technology and consumer goods industries saw the most demand
• 8 license transactions over $1 million and 13 license transactions between $500K and $1 million
• 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
• 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
• OpenText acquires Resonate Knowledge Technologies
• OpenText appoints Kevin Cochrane as Chief Marketing Officer
• Gartner recognizes OpenText in Business Process Management suites report
• Independent research firm highlights OpenText's BPM capabilities
• 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).

Summary of Quarterly Results
				Q3 FY13			Q2 FY13			Q3 FY12			% Change (Q/Q)				% Change (Y/Y)
Revenue (million)				$337.7			$352.2			$292.3			(4.1)%				15.5%
GAAP-based gross margin				64.2%			65.2%			63.6%			(100)		bps		60		bps
GAAP-based operating income margin				12.1%			19.1%			9.3%			(700)		bps		280		bps
GAAP-based EPS, diluted				$0.44			$1.04			$0.59			(57.7)%				(25.4)%
Non-GAAP-based gross margin (2)				71.2%			71.8%			71.0%			(60)		bps		20		bps
Non-GAAP-based operating margin (2)				26.8%			32.1%			25.2%			(530)		bps		160		bps
Non-GAAP-based EPS, diluted (2)				$1.26			$1.58			$1.01			(20.3)%				24.8%

Summary of Year to Date Results
				Q3 FY13			Q2 FY13			Q3 FY12			% Change (Y/Y) (bps)
Revenue (million)				$1,016.1			$678.4			$901.8			12.7%
GAAP-based gross margin				64.2%			64.1%			65.2%			(100)		bps
GAAP-based operating income margin				14.6%			15.8%			12.2%			240		bps
GAAP-based EPS, diluted				$1.80			$1.37			$2.00			(10.0)%
Non-GAAP-based gross margin (2)				71.2%			71.1%			72.3%			(110)		bps
Non-GAAP-based operating margin (2)				29.2%			30.5%			27.2%			200		bps
Non-GAAP-based EPS, diluted (2)				$4.14			$2.89			$3.43			20.7%

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)
			March 31, 2013				June 30, 2012
			(unaudited)
ASSETS
Cash and cash equivalents			$	446,911			$	559,747
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				174,563				163,664
Income taxes recoverable				23,977				17,849
Prepaid expenses and other current assets				47,787				44,011
Deferred tax assets				15,727				4,003
		Total current assets		708,965				789,274
Property and equipment				83,776				81,157
Goodwill				1,241,960				1,040,234
Acquired intangible assets				397,154				312,563
Deferred tax assets				141,501				115,128
Other assets				21,528				23,739
Deferred charges				58,598				68,653
Long-term income taxes recoverable				11,840				13,545
	Total assets		$	2,665,322			$	2,444,293
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable and accrued liabilities		$	199,501			$	131,734
	Current portion of long-term debt			48,475				41,374
	Deferred revenues			297,130				273,987
	Income taxes payable			6,323				27,806
	Deferred tax liabilities			1,188				1,612
		Total current liabilities		552,617				476,513
Long-term liabilities:
	Accrued liabilities			19,109				14,247
	Deferred credits			12,232				10,086
	Pension liability			24,429				22,074
	Long-term debt			525,000				555,000
	Deferred revenues			10,824				12,653
	Long-term income taxes payable			151,643				147,623
	Deferred tax liabilities			71,972				26,705
		Total long-term liabilities		815,209				788,388
Shareholders' equity:
	Share capital
	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			643,296				635,321
	Additional paid-in capital			96,159				95,026
	Accumulated other comprehensive income			38,699				44,364
	Retained earnings			548,416				442,068
	Treasury stock, at cost (610,878 and 793,494 shares at March 31, 2013 and at June 30, 2012, respectively)			(29,074)				(37,387)
Total shareholders' equity				1,297,496				1,179,392
	Total liabilities and shareholders' equity		$	2,665,322			$	2,444,293

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of U.S. dollars, except share and per share data) (unaudited)
				Three Months Ended March 31,								Nine Months Ended March 31,
				2013				2012				2013				2012
Revenues:
	License			$	69,035			$	60,957			$	200,816			$	215,688
	Cloud Services				44,437				—				135,472				—
	Customer support				166,573				166,057				493,327				493,440
	Professional service and other				57,650				65,333				186,454				192,721
		Total revenues			337,695				292,347				1,016,069				901,849
Cost of revenues:
	License				3,079				4,549				12,578				13,917
	Cloud services				18,891				—				55,435				—
	Customer support				27,497				27,987				81,597				82,724
	Professional service and other				48,252				52,596				144,498				153,551
	Amortization of acquired technology-based intangible assets				23,058				21,264				70,031				63,307
		Total cost of revenues			120,777				106,396				364,139				313,499
Gross profit					216,918				185,951				651,930				588,350
Operating expenses:
	Research and development				43,003				41,738				121,627				127,848
	Sales and marketing				77,327				69,572				209,819				202,903
	General and administrative				27,061				21,999				85,199				72,886
	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

United States:

Greg Secord
Vice President, Investor Relations
Open Text Corporation
San Francisco: [phone]
New York: [phone]
[email protected]

Canada:

Sonya Mehan
Senior Manager, Investor Relations
Open Text Corporation
519-888-7111 ext. 2446
[email protected]