0001002638-14-000010.txt : 20140123 0001002638-14-000010.hdr.sgml : 20140123 20140123162011 ACCESSION NUMBER: 0001002638-14-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20140123 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140123 DATE AS OF CHANGE: 20140123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPEN TEXT CORP CENTRAL INDEX KEY: 0001002638 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 980154400 STATE OF INCORPORATION: A6 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27544 FILM NUMBER: 14543212 BUSINESS ADDRESS: STREET 1: 275 FRANK TOMPA DRIVE STREET 2: WATERLOO CITY: ONTARIO CANADA STATE: A6 ZIP: N2L 0A1 BUSINESS PHONE: 519-888-7111 MAIL ADDRESS: STREET 1: 275 FRANK TOMPA DRIVE STREET 2: WATERLOO CITY: ONTARIO CANADA STATE: A6 ZIP: N2L 0A1 8-K 1 a8-kxearningsreleaseq2x14.htm 8-K 8-K - earnings release Q2-14



 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________
FORM 8-K
______________________

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 23, 2014
______________________

Open Text Corporation
(Exact name of Registrant as specified in its charter)
______________________

 
 
 
Canada
0-27544
98-0154400
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1
(Address of principal executive offices)
(519) 888-7111
(Registrant's telephone number, including area code)
______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
•Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
•Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
•Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
•Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 






Item 2.02
Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.”
On January 23, 2014, Open Text Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2013. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
Item 8.01.
Other Events.
The following information is filed pursuant to Item 8.01 "Other Events"
Stock Dividends
As of January 23, 2014 the Company's Board of Directors approved a two-for-one stock split of its outstanding common shares. The two-for-one stock split will be implemented by way of a stock dividend whereby shareholders will receive one common share for each common share held.
The record date for the stock dividend will be February 7, 2014 and the payment date will be February 18, 2014. OpenText’s common shares will be traded in accordance with the “due bill” procedures of the NASDAQ and the Toronto Stock Exchange from February 5, 2014 through February 18, 2014. This means any trades that are executed on the NASDAQ or the Toronto Stock Exchange during this period will be identified to ensure purchasers of OpenText’s common shares receive the entitlement to the stock dividend. OpenText’s common shares are expected to begin trading on a post-stock dividend basis on the NASDAQ and on the Toronto Stock Exchange on February 19, 2014. The due bill redemption date will be February 21, 2014.
As of January 22, 2014 there were 60,473,680 OpenText common shares outstanding. Adjusting for the stock split, there will be 120,947,360 OpenText common shares outstanding.
For more details relating to the Company's declaration of stock dividends, see a copy of the Company's press release filed as Exhibit 99.2 to this Form 8-K.
Cash Dividends
Pursuant to the Company's dividend policy, the Board of Directors of the Company has declared a dividend of $0.15 per common share (or $0.30 per common share on a pre stock split basis), payable on March 14, 2014, to the shareholders of the Company of record on February 25, 2014.
The declaration, payment and amount of any future dividends will be made pursuant to the Company's dividend policy and is subject to final determination each quarter by the Board of Directors in its discretion based on a number of factors that it deems relevant, including the Company's financial position, results of operations, available cash resources, cash requirements and alternative uses of cash that the Board of Directors may conclude would be in the best interest of the shareholders of the Company. Payment of dividends is also subject to relevant contractual limitations, including those in the Company's existing credit agreements. Accordingly, there can be no assurance that any future dividends will be equal or similar in amount to any dividends previously paid or that the Board of Directors will not decide to reduce, suspend or discontinue the payment of dividends in the future.

Item  9.01
Financial Statements and Exhibits
(d)
Exhibits
 
Exhibit
No.
 
 
Description
 
 
 
 
99.1
 
Press Release of financial results issued by Open Text Corporation on January 23, 2014
99.2
 
Press Release of Stock Dividends Declaration issued by Open Text Corporation on January 23, 2014
 




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
 
OPEN TEXT CORPORATION
 
 
 
 
 
January 23, 2014
 
By:
/s/ Paul McFeeters
 
 
 
 
Paul McFeeters
Chief Financial Officer and Chief Administrative Officer

 




Exhibit Index
 
Exhibit
No.
 
 
Description
 
99.1
 
Press Release of financial results issued by Open Text Corporation on January 23, 2014
99.2
 
Press Release of Stock Dividends Declaration issued by Open Text Corporation on January 23, 2014
 



 EX-99.1 2 exhibit991q2-14pressrelease.htm EXHIBIT Exhibit 99.1 Q2-14 Press release


Exhibit 99.1

OpenText Reports Second Quarter Fiscal Year 2014 Financial Results
Waterloo, ON, January 23, 2014 - Open Text Corporation (NASDAQ: OTEX) (TSX: OTC) announced today its financial results for the second quarter ended December 31, 2013.
Financial Highlights for Q2 FY14 (1)
•
Total revenue was $363.5 million, up 3% Y/Y
•
License revenue was $81.2 million, up 7% Y/Y
•
Customer Support revenue was $174.4 million, up 6% Y/Y
•
Non-GAAP-based EPS, diluted was $1.58 compared to $1.58, flat Y/Y; GAAP-based EPS, diluted was $0.90 compared to $1.04 Y/Y (2)
•
Non-GAAP-based income from operations was $112.3 million and 31% of revenues; GAAP-based income from operations was $73.9 million and 20% of revenues (2)
•
Operating cash flow was $60.9 million, compared to $74.7 million Y/Y, down 19%Y/Y, with an ending cash balance of $515.4 million.

“The OpenText product lineup has never been stronger with our Enterprise Suites for EIM, AppWorks for Developers and now GXS for B2B integration" said OpenText CEO Mark J. Barrenechea. “We are committed to leading Enterprise Information Management with the best products and cloud-based services. The OpenText Cloud now manages over 16 billion transactions per year, approximately 600,000 trading partners and 40,000 customers. I am pleased with our progress that includes 7% year over year license growth.”

Business Highlights

•
OpenText buys GXS, a Maryland-based leader in business-to-business (B2B) cloud integration
•
Financial, services and public sector industries saw the most demand
•
6 license transactions over $1 million and 15 license transactions between $500K and $1 million
•
Hosted OpenText Enterprise World 2013, the Company’s largest conference ever; launched seven product suites and developer platform AppWorks
•
Customer successes in the quarter include CZ, Home Trust, Sobeys Inc., Insurance Corporation of British Columbia, Fox Entertainment Group, MMM Group, Qatar University and iGATE-CHCS Services, Inc.
•
OpenText begins to ship integration suites as part of Project Red Oxygen
•
Unveiled new generation of web-based high-performance remote application access solution
•
Launched new secure messaging cloud services
•
Unveiled OpenText Extended ECM for Oracle E-Business Suite
•
Partnered with hybris software, an SAP company, to enhance its customer experience management (CEM) ecosystem
•
OpenText named a leader in Document Output for Customer Communications Management in leading analyst firm report (Forrester Research, Inc.)

Dividend Program Highlights

Stock Dividends
On January 23, 2014, we announced that our Board of Directors approved a two-for-one stock split of our outstanding Common Shares. The two-for-one stock split will be implemented by way of a stock dividend whereby shareholders will receive one Common Share for each Common Share held. The record date for the stock dividend will be February 7, 2014 and the payment date will be February 18, 2014. We are undertaking the stock split to make our Common Shares more readily accessible to individual shareholders, increase and broaden our shareholder base, and improve the liquidity of the market for our Common Shares. As of January 22, 2014 there were 60,473,680 OpenText Common Shares outstanding. Adjusting for the stock split, there will be 120,947,360 OpenText Common Shares outstanding.


1


Cash Dividends
As part of our quarterly, non cumulative cash dividend program we declared, on January 23, 2014 a dividend of $0.15 per Common Share (or $0.30 per Common Share on a pre stock split basis). The record date for this dividend is February 25, 2014 and the payment date is March 14, 2014. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board of Directors.

Summary of Quarterly Results
 
 
 
 
 
 
 
 
Q2 FY14
Q1 FY14
Q2 FY13
% Change 
(Q/Q) 
 
% Change
(Y/Y)
 
Revenue (million)

$363.5


$324.5


$352.2

12.0
%
 
3.2
 %
 
GAAP-based gross margin
70.3
%
67.2
%
64.8
%
310

bps
550

bps
GAAP-based operating margin
20.3
%
16.0
%
19.1
%
430

bps
120

bps
GAAP-based EPS, diluted

$0.90


$0.52


$1.04

73.1
%
 
(13.5
)%
 
Non-GAAP-based gross margin (2)
74.0
%
73.9
%
71.5
%
10

bps
250

bps
Non-GAAP-based operating margin (2)
30.9
%
30.6
%
32.1
%
30

bps
(120
)
bps
Non-GAAP-based EPS, diluted (2)

$1.58


$1.37


$1.58

15.3
%
 
—
 %
 

Summary of Year to Date Results
 
 
 
 
 
 
Q2 FY14
Q1 FY14
Q2 FY13
% Change
(Y/Y)
 
Revenue (million)

$688.0


$324.5


$678.4

1.4
%
 
GAAP-based gross margin
68.8
%
67.2
%
63.8
%
500

bps
GAAP-based operating margin
18.3
%
16.0
%
15.8
%
250

bps
GAAP-based EPS, diluted

$1.41


$0.52


$1.37

2.9
%
 
Non-GAAP-based gross margin (2)
74.0
%
73.9
%
70.8
%
320

bps
Non-GAAP-based operating margin (2)
30.7
%
30.6
%
30.5
%
20

bps
Non-GAAP-based EPS, diluted (2)

$2.95


$1.37


$2.89

2.1
%
 


Conference Call Information

The public is invited to listen to the earnings conference call today at 5:00 p.m. ET (2:00 p.m. PT) by dialing 1-800-814-4859 (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://investors.opentext.com/events.cfm

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 February 6, 2014 and can be accessed by dialing 1-877-289-8525 (toll-free) or 416-640-1917 (international) and entering the confirmation code: 4661601 followed by the number sign.

Please see below note (2) for a reconciliation of non-U.S. GAAP-based financial measures used in this press release, to U.S. 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.

2


Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements about the focus of Open Text Corporation (“OpenText” or “the Company”) in Fiscal 2014 on growth in earnings and cash flows, creating value through investments in broader Enterprise Information Management (EIM) capabilities, distribution, the Company's presence in the cloud and in growth markets, its financial conditions, results of operations and earnings, declaration of quarterly dividends, and other matters, may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", and other similar language and are considered forward-looking statements or information under applicable securities laws. In addition, any information or statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially. Such factors include, but are not limited to: (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. 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 Exchange Act, and the rules promulgated thereunder; (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 Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

United States:

Greg Secord
Vice President, Investor Relations
Open Text Corporation
San Francisco: 415-963-0825
gsecord@opentext.com

Canada:

Sonya Mehan
Senior Manager, Investor Relations
Open Text Corporation
Waterloo: 519-888-7111 ext. 2446
smehan@opentext.com


Copyright ©2014 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.

3


OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
 
December 31, 2013
 
June 30, 2013
 
(Unaudited)
 
 
ASSETS
 
 
 
Cash and cash equivalents
$
515,354

 
$
470,445

Accounts receivable trade, net of allowance for doubtful accounts of $3,937 as of December 31, 2013 and $4,871 as of June 30, 2013
173,347

 
174,927

Income taxes recoverable
14,048

 
17,173

Prepaid expenses and other current assets
48,348

 
43,464

Deferred tax assets
10,671

 
11,082

Total current assets
761,768

 
717,091

Property and equipment
96,737

 
88,364

Goodwill
1,267,317

 
1,246,872

Acquired intangible assets
324,185

 
363,615

Deferred tax assets
133,502

 
135,695

Other assets
26,648

 
25,082

Deferred charges
60,005

 
67,633

Long-term income taxes recoverable
10,560

 
10,465

Total assets
$
2,680,722

 
$
2,654,817

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
188,896

 
$
188,443

Current portion of long-term debt
54,994

 
51,742

Deferred revenues
246,738

 
282,387

Income taxes payable
6,494

 
4,184

Deferred tax liabilities
1,150

 
1,127

Total current liabilities
498,272

 
527,883

Long-term liabilities:
 
 
 
Accrued liabilities
19,344

 
17,849

Deferred credits
18,401

 
11,608

Pension liability
25,062

 
24,509

Long-term debt
491,250

 
513,750

Deferred revenues
13,014

 
11,830

Long-term income taxes payable
146,848

 
140,508

Deferred tax liabilities
62,245

 
69,672

Total long-term liabilities
776,164

 
789,726

Shareholders' equity:
 
 
 
Share capital
 
 
 
59,159,544 and 59,028,886 Common Shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively; Authorized Common Shares: unlimited
656,901

 
651,642

Additional paid-in capital
105,281

 
101,865

Accumulated other comprehensive income
42,677

 
39,890

Retained earnings
621,547

 
572,885

Treasury stock, at cost (416,707 shares at December 31, 2013 and 610,878 at June 30, 2013, respectively)
(20,120
)
 
(29,074
)
Total shareholders' equity
1,406,286

 
1,337,208

Total liabilities and shareholders' equity
$
2,680,722

 
$
2,654,817

 

4



OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)
 
 
 
Three Months Ended
December 31,
 
Six Months Ended
December 31,
 
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
 
License
 
$
81,164

 
$
76,125

 
$
136,470

 
$
131,781

Cloud services
 
42,131

 
44,842

 
83,778

 
88,715

Customer support
 
174,425

 
164,658

 
342,865

 
326,754

Professional service and other
 
65,787

 
66,555

 
124,854

 
131,124

Total revenues
 
363,507

 
352,180

 
687,967

 
678,374

Cost of revenues:
 
 
 
 
 
 
 
 
License
 
3,304

 
5,331

 
6,340

 
9,499

Cloud services
 
15,963

 
17,946

 
30,228

 
35,928

Customer support
 
24,409

 
28,277

 
46,579

 
54,100

Professional service and other
 
51,245

 
49,242

 
96,680

 
99,294

Amortization of acquired technology-based intangible assets
 
13,035

 
23,191

 
34,565

 
46,973

Total cost of revenues
 
107,956

 
123,987

 
214,392

 
245,794

Gross profit
 
255,551

 
228,193

 
473,575

 
432,580

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
41,917

 
38,718

 
82,133

 
78,624

Sales and marketing
 
81,290

 
67,977

 
150,703

 
132,492

General and administrative
 
32,815

 
28,742

 
61,701

 
55,706

Depreciation
 
6,898

 
6,105

 
13,356

 
12,214

Amortization of acquired customer-based intangible assets
 
12,432

 
17,147

 
29,709

 
34,399

Special charges
 
6,268

 
2,269

 
9,999

 
11,823

Total operating expenses
 
181,620

 
160,958

 
347,601

 
325,258

Income from operations
 
73,931

 
67,235

 
125,974

 
107,322

Other income (expense), net
 
(740
)
 
1,541

 
1,186

 
1,470

Interest and other related expense, net
 
(3,040
)
 
(4,515
)
 
(7,425
)
 
(8,883
)
Income before income taxes
 
70,151

 
64,261

 
119,735

 
99,909

Provision for income taxes
 
16,651

 
3,153

 
35,605

 
19,372

Net income for the period
 
$
53,500

 
$
61,108

 
$
84,130

 
$
80,537

Earnings per share—basic
 
$
0.90

 
$
1.04

 
$
1.42

 
$
1.38

Earnings per share—diluted
 
$
0.90

 
$
1.04

 
$
1.41

 
$
1.37

Weighted average number of Common Shares outstanding—basic
 
59,136

 
58,503

 
59,100

 
58,473

Weighted average number of Common Shares outstanding—diluted
 
59,593

 
58,983

 
59,475

 
58,961

Dividends declared per Common Share
 
$
0.30

 
$
—

 
$
0.60

 
$
—



5



OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)



 
Three Months Ended
December 31,
 
Six Months Ended
December 31,
 
2013
 
2012
 
2013
 
2012
Net income for the period
$
53,500

 
$
61,108

 
$
84,130

 
$
80,537

Other comprehensive income—net of tax:
 
 
 
 
 
 
 
Net foreign currency translation adjustments
113

 
(989
)
 
354

 
(1,465
)
Unrealized gain (loss) on cash flow hedges
 
 
 
 
 
 
 
Unrealized gain (loss)
(1,433
)
 
(495
)
 
87

 
2,005

(Gain) loss reclassified into net income
589

 
(958
)
 
1,173

 
(1,514
)
Actuarial gain (loss) relating to defined benefit pension plans
 
 
 
 
 
 
 
Actuarial gain (loss)
944

 
(695
)
 
1,027

 
(876
)
Amortization of actuarial loss into net income
73

 
75

 
146

 
147

Total other comprehensive income (loss), net, for the period
286

 
(3,062
)
 
2,787

 
(1,703
)
Total comprehensive income
$
53,786

 
$
58,046

 
$
86,917

 
$
78,834



6


OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
 
Three Months Ended
December 31,
 
Six Months Ended
December 31,
 
2013
 
2012
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
 
 
 
Net income for the period
$
53,500

 
$
61,108

 
$
84,130

 
$
80,537

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization of intangible assets
32,365

 
46,443

 
77,630

 
93,586

Share-based compensation expense
6,677

 
3,174

 
11,289

 
6,276

Excess tax benefits on share-based compensation expense
(1,008
)
 
(259
)
 
(1,081
)
 
(611
)
Pension expense
309

 
228

 
539

 
470

Amortization of debt issuance costs
519

 
535

 
1,044

 
1,072

Amortization of deferred charges and credits
2,967

 
2,929

 
5,934

 
5,858

Loss on sale and write down of property and equipment
(6
)
 
22

 
15

 
24

Deferred taxes
(1,329
)
 
(2,013
)
 
(3,198
)
 
(1,152
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
(19,602
)
 
964

 
9,176

 
20,406

Prepaid expenses and other current assets
(729
)
 
(1,640
)
 
(4,161
)
 
1,384

Income taxes
(5,093
)
 
(18,261
)
 
2,409

 
(13,888
)
Deferred charges and credits
5,788

 
—

 
8,488

 
(436
)
Accounts payable and accrued liabilities
7,375

 
(365
)
 
(10,595
)
 
(20,620
)
Deferred revenue
(21,574
)
 
(18,668
)
 
(40,134
)
 
(36,738
)
Other assets
716

 
497

 
(686
)
 
289

Net cash provided by operating activities
60,875

 
74,694

 
140,799

 
136,457

Cash flows from investing activities:
 
 
 
 
 
 
 
Additions of property and equipment
(11,913
)
 
(4,879
)
 
(20,228
)
 
(9,917
)
Purchase of patents
(192
)
 
—

 
(192
)
 
—

Purchase of EasyLink Services International Corporation, net of cash acquired
—

 
—

 
—

 
(315,331
)
Purchase of System Solutions Australia Pty Limited (MessageManager), net of cash acquired
—

 
(516
)
 
—

 
(516
)
Purchase of Cordys Holding B.V., net of cash acquired
—

 
—

 
(30,588
)
 
—

Purchase consideration for prior period acquisitions
(221
)
 
(214
)
 
(443
)
 
(431
)
Other investing activities
526

 
—

 
(974
)
 
—

Net cash used in investing activities
(11,800
)
 
(5,609
)
 
(52,425
)
 
(326,195
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Excess tax benefits on share-based compensation expense
1,008

 
259

 
1,081

 
611

Proceeds from issuance of Common Shares
3,606

 
2,409

 
5,429

 
6,402

Repayment of long-term debt
(11,419
)
 
(7,671
)
 
(19,087
)
 
(15,338
)
Debt issuance costs
(273
)
 
—

 
(273
)
 
—

Payments of dividends to shareholders
(17,747
)
 
—

 
(35,468
)
 
—

Net cash used in financing activities
(24,825
)
 
(5,003
)
 
(48,318
)
 
(8,325
)
Foreign exchange gain on cash held in foreign currencies
(43
)
 
941

 
4,853

 
5,574

Increase (decrease) in cash and cash equivalents during the period
24,207

 
65,023

 
44,909

 
(192,489
)
Cash and cash equivalents at beginning of the period
491,147

 
302,235

 
470,445

 
559,747

Cash and cash equivalents at end of the period
$
515,354

 
$
367,258

 
$
515,354

 
$
367,258


7


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 U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (non-GAAP).These non-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-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 these non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its consolidated financial statements, all of which should be considered when evaluating the Company's results.
The Company uses these non-GAAP financial measures to supplement the information provided in its consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of non-GAAP financial measures are not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. 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 U.S. GAAP measures with certain non-GAAP measures defined below.
Non-GAAP-based net income and non-GAAP-based EPS are calculated as net income or net income per share on a diluted basis, excluding, the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges, all net of tax. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets. Non-GAAP-based gross margin is calculated as non-GAAP-based gross profit expressed as a percentage of revenue. Non-GAAP-based income from operations is calculated as income from operations, excluding, the amortization of acquired intangible assets, special charges, and share-based compensation. Non-GAAP-based operating margin is calculated as non-GAAP-based income from operations expressed as a percentage of revenue.
The Company's management believes that the presentation, of the above defined non-GAAP financial measures, provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term “non-operational charge” is defined for this purpose as an expense that does not impact the ongoing 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, including amortization of acquired intangible assets, special charges, 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 U.S. GAAP.
The Company believes the provision of supplemental non-GAAP measures allow 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 future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary non-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 U.S. GAAP-based financial measures to non-U.S. GAAP-based financial measures for the following periods presented:


8


Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended December 31, 2013.
(In thousands except for per share amounts)
 
Three Months Ended
December 31, 2013
 
GAAP-based
Measures 
GAAP-based Measures
% of Revenue
Adjustments 
Note
Non-GAAP-based
Measures 
Non-GAAP-based Measures
% of Revenue
Cost of revenues
 
 
 
 
 
 
Cloud services
$
15,963

 
$
60

(1
)
$
16,023

 
Customer support
24,409

 
(312
)
(1
)
24,097

 
Professional service and other
51,245

 
(328
)
(1
)
50,917

 
Amortization of acquired technology-based intangible assets
13,035

 
(13,035
)
(2
)
—

 
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%)
255,551

70.3
%
13,615

(3
)
269,166

74.0
%
Operating expenses
 

 
 

 
 

 
Research and development
41,917

 
(794
)
(1
)
41,123

 
Sales and marketing
81,290

 
(1,921
)
(1
)
79,369

 
General and administrative
32,815

 
(3,382
)
(1
)
29,433

 
Amortization of acquired customer-based intangible assets
12,432

 
(12,432
)
(2
)
—

 
Special charges
6,268

 
(6,268
)
(4
)
—

 
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)
73,931

20.3
%
38,412

(5
)
112,343

30.9
%
Other income (expense), net
(740
)
 
740

(6
)
—

 
Provision for (recovery of) income taxes
16,651

 
(1,349
)
(7
)
15,302

 
GAAP-based net income / Non-GAAP-based net income
53,500

 
40,501

(8
)
94,001

 
GAAP-based earnings per share /
Non GAAP-based earnings per share-diluted
$
0.90

 
$
0.68

(8
)
$
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)
GAAP-based and Non-GAAP-based gross profit stated in dollar, and gross margin stated as a percentage of revenue.
(4)
Adjustment relates to the exclusion of Special charges from our Non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the relevant acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.
(5)
GAAP-based and Non-GAAP-based income from operations stated in dollar, and operating margin stated as a percentage of revenue.
(6)
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 is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.
(7)
Adjustment relates to differences between the GAAP-based tax provision of approximately 24% 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.
(8)
Reconciliation of Non-GAAP-based adjusted net income to GAAP-based net income:  

9


 
Three Months Ended
December 31, 2013
 
 
Per share diluted  

Non-GAAP-based net income
$
94,001

$
1.58

Less:
 
 
Amortization
25,467

0.43

Share-based compensation
6,677

0.11

Special charges
6,268

0.11

Other (income) expense, net
740

0.01

GAAP-based provision for (recovery of) income taxes
16,651

0.28

Non-GAAP-based provision for income taxes
(15,302
)
(0.26
)
GAAP-based net income
$
53,500

$
0.90


10


Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the six months ended December 31, 2013.
(In thousands except for per share amounts)
 
Six Months Ended
December 31, 2013
 
GAAP-based
Measures 
GAAP-based Measures
% of Revenue
Adjustments 
Note
Non-GAAP-based
Measures 
Non-GAAP-based Measures
% of Revenue
Cost of revenues
 
 
 
 
 
 
Cloud services
$
30,228

 
$
22

(1
)
$
30,250

 
Customer support
46,579

 
(409
)
(1
)
46,170

 
Professional service and other
96,680

 
(498
)
(1
)
96,182

 
Amortization of acquired technology-based intangible assets
34,565

 
(34,565
)
(2
)
—

 
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%)
473,575

68.8
%
35,450

(3
)
509,025

74.0
%
Operating expenses
 

 
 

 
 

 
Research and development
82,133

 
(1,522
)
(1
)
80,611

 
Sales and marketing
150,703

 
(4,274
)
(1
)
146,429

 
General and administrative
61,701

 
(4,608
)
(1
)
57,093

 
Amortization of acquired customer-based intangible assets
29,709

 
(29,709
)
(2
)
—

 
Special charges
9,999

 
(9,999
)
(4
)
—

 
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)
125,974

18.3
%
85,562

(5
)
211,536

30.7
%
Other income (expense), net
1,186

 
(1,186
)
(6
)
—

 
Provision for (recovery of) income taxes
35,605

 
(7,029
)
(7
)
28,576

 
GAAP-based net income / Non-GAAP-based net income
84,130

 
91,405

(8
)
175,535

 
GAAP-based earnings per share /
Non GAAP-based earnings per share-diluted
$
1.41

 
$
1.54

(8
)
$
2.95

 
(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)
GAAP-based and Non-GAAP-based gross profit stated in dollar, and gross margin stated as a percentage of revenue.
(4)
Adjustment relates to the exclusion of Special charges from our Non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the relevant acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.
(5)
GAAP-based and Non-GAAP-based income from operations stated in dollar, and operating margin stated as a percentage of revenue.
(6)
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 is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.
(7)
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.
(8)
Reconciliation of Non-GAAP-based adjusted net income to GAAP-based net income:  

11


 
Six Months Ended
December 31, 2013
 
 
Per share diluted  

Non-GAAP-based net income
$
175,535

$
2.95

Less:
 
 
Amortization
64,274

1.08

Share-based compensation
11,289

0.19

Special charges
9,999

0.17

Other (income) expense, net
(1,186
)
(0.02
)
GAAP-based provision for (recovery of) income taxes
35,605

0.60

Non-GAAP-based provision for income taxes
(28,576
)
(0.48
)
GAAP-based net income
$
84,130

$
1.41



12


Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended September 30, 2013.
(In thousands except for per share amounts)
 
Three Months Ended
September 30, 2013
 
GAAP-based
Measures 
GAAP-based Measures
% of Revenue
Adjustments 
Note
Non-GAAP-based
Measures 
Non-GAAP-based Measures
% of Revenue
Cost of revenues
 
 
 
 
 
 
Cloud services
$
14,265

 
$
(38
)
(1
)
$
14,227

 
Customer support
22,170

 
(97
)
(1
)
22,073

 
Professional service and other
45,435

 
(170
)
(1
)
45,265

 
Amortization of acquired technology-based intangible assets
21,530

 
(21,530
)
(2
)
—

 
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%)
218,024

67.2
%
21,835

(3
)
239,859

73.9
%
Operating expenses
 

 
 

 
 

 
Research and development
40,216

 
(728
)
(1
)
39,488

 
Sales and marketing
69,413

 
(2,353
)
(1
)
67,060

 
General and administrative
28,886

 
(1,226
)
(1
)
27,660

 
Amortization of acquired customer-based intangible assets
17,277

 
(17,277
)
(2
)
—

 
Special charges
3,731

 
(3,731
)
(4
)
—

 
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)
52,043

16.0
%
47,150

(5
)
99,193

30.6
%
Other income (expense), net
1,926

 
(1,926
)
(6
)
—

 
Provision for (recovery of) income taxes
18,954

 
(5,681
)
(7
)
13,273

 
GAAP-based net income / Non-GAAP-based net income
30,630

 
50,905

(8
)
81,535

 
GAAP-based earnings per share /
Non GAAP-based earnings per share-diluted
$
0.52

 
$
0.85

(8
)
$
1.37

 
(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)
GAAP-based and Non-GAAP-based gross profit stated in dollar, and gross margin stated as a percentage of revenue.
(4)
Adjustment relates to the exclusion of Special charges from our Non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the relevant acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.
(5)
GAAP-based and Non-GAAP-based income from operations stated in dollar, and operating margin stated as a percentage of revenue.
(6)
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 is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.
(7)
Adjustment relates to differences between the GAAP-based tax recovery of approximately 38% 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.
(8)
Reconciliation of Non-GAAP-based adjusted net income to GAAP-based net income:  


13


 
Three Months Ended
September 30, 2013
 
 
Per share diluted  

Non-GAAP-based net income
$
81,535

$
1.37

Less:
 
 
Amortization
38,807

0.65

Share-based compensation
4,612

0.08

Special charges
3,731

0.06

Other (income) expense, net
(1,926
)
(0.03
)
GAAP-based provision for (recovery of) income taxes
18,954

0.32

Non-GAAP-based provision for income taxes
(13,273
)
(0.23
)
GAAP-based net income
$
30,630

$
0.52


14


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 
GAAP-based Measures
% of Revenue
Adjustments 
Note
Non-GAAP-based
Measures 
Non-GAAP-based Measures
% of Revenue
Cost of revenues:
 
 
 
 
 
 
Cloud services
$
17,946

 
$
(30
)
(1
)
$
17,916

 
Customer support
28,277

 
(107
)
(1
)
28,170

 
Professional service and other
49,242

 
(188
)
(1
)
49,054

 
Amortization of acquired technology-based intangible assets
23,191

 
(23,191
)
(2
)
—

 
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%)
228,193

64.8
%
23,516

(3
)
251,709

71.5
%
Operating expenses
 
 
 
 
 
 
Research and development
38,718

 
(331
)
(1
)
38,387

 
Sales and marketing
67,977

 
(1,653
)
(1
)
66,324

 
General and administrative
28,742

 
(865
)
(1
)
27,877

 
Amortization of acquired customer-based intangible assets
17,147

 
(17,147
)
(2
)
—

 
Special charges
2,269

 
(2,269
)
(4
)
—

 
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)
67,235

19.1
%
45,781

(5
)
113,016

32.1
%
Other income (expense), net
1,541

 
(1,541
)
(6
)
—

 
Provision for (recovery of) income taxes
3,153

 
12,037

(7
)
15,190

 
GAAP-based net income / Non-GAAP-based net income
61,108

 
32,203

(8
)
93,311

 
GAAP-based earnings per share /
Non GAAP-based earnings per share-diluted
$
1.04

 
$
0.54

(8
)
$
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)
GAAP-based and Non-GAAP-based gross profit stated in dollar, and gross margin stated as a percentage of revenue.
(4)
Adjustment relates to the exclusion of Special charges from our Non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the relevant acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.
(5)
GAAP-based and Non-GAAP-based income from operations stated in dollar, and operating margin stated as a percentage of revenue.
(6)
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 is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.
(7)
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.
(8)
Reconciliation of Non-GAAP-based adjusted net income to GAAP-based net income:  


15


 
 
Three Months Ended
December 31, 2012
 
 
Per share diluted  

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 (recovery of) 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


16


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 
GAAP-based Measures
% of Revenue
Adjustments 
Note
Non-GAAP-based
Measures 
Non-GAAP-based Measures
% of Revenue
Cost of revenues:
 
 
 
 
 
 
Cloud services
$
35,928

 
$
(30
)
(1
)
$
35,898

 
Customer support
54,100

 
(145
)
(1
)
53,955

 
Professional service and other
99,294

 
(365
)
(1
)
98,929

 
Amortization of acquired technology-based intangible assets
46,973

 
(46,973
)
(2
)
—

 
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%)
432,580

63.8
%
47,513

(3
)
480,093

70.8
%
Operating expenses
 
 
 
 
 
 
Research and development
78,624

 
(669
)
(1
)
77,955

 
Sales and marketing
132,492

 
(3,319
)
(1
)
129,173

 
General and administrative
55,706

 
(1,748
)
(1
)
53,958

 
Amortization of acquired customer-based intangible assets
34,399

 
(34,399
)
(2
)
—

 
Special charges
11,823

 
(11,823
)
(4
)
—

 
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%)
107,322

15.8
%
99,471

(5
)
206,793

30.5
%
Other income (expense), net
1,470

 
(1,470
)
(6
)
—

 
Provision for (recovery of) income taxes
19,372

 
8,335

(7
)
27,707

 
GAAP-based net income / Non-GAAP-based net income
80,537

 
89,666

(8
)
170,203

 
GAAP-based earnings per share /
Non GAAP-based earnings per share-diluted
$
1.37

 
$
1.52

(8
)
$
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)
GAAP-based and Non-GAAP-based gross profit stated in dollar, and gross margin stated as a percentage of revenue.
(4)
Adjustment relates to the exclusion of Special charges from our Non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the relevant acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.
(5)
GAAP-based and Non-GAAP-based income from operations stated in dollar, and operating margin stated as a percentage of revenue.
(6)
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 is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.
(7)
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.
(8)
Reconciliation of Non-GAAP-based adjusted net income to GAAP-based net income:  


17


 
 
Six Months Ended
December 31, 2012
 
 
Per share diluted  

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 (recovery of) 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



18



(3)
The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three and six months ended December 31, 2013 and 2012:

 
Three Months Ended
December 31, 2013
 
Three Months Ended
December 31, 2012
Currencies
 
% of Revenue 
 
% of Expenses* 
 
 
% of Revenue 
 
% of Expenses* 
 
EURO
29
%
19
%
 
26
%
16
%
GBP
8
%
9
%
 
8
%
8
%
CAD
6
%
17
%
 
6
%
19
%
USD
46
%
40
%
 
48
%
43
%
Other
11
%
15
%
 
12
%
14
%
Total
100
%
100
%
 
100
%
100
%

 
Six Months Ended
December 31, 2013
 
Six Months Ended
December 31, 2012
Currencies
 
% of Revenue 
 
% of Expenses* 
 
 
% of Revenue 
 
% of Expenses* 
 
EURO
28
%
18
%
 
25
%
16
%
GBP
8
%
9
%
 
8
%
8
%
CAD
6
%
17
%
 
6
%
18
%
USD
48
%
41
%
 
49
%
44
%
Other
10
%
15
%
 
12
%
14
%
Total
100
%
100
%
 
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.

19
 EX-99.2 3 exhibit992q2-14pressreleas.htm EXHIBIT Exhibit 99.2 Q2-14 Press Release Stock Dividend


Exhibit 99.2

OpenText Announces Two-For-One Stock Split
Waterloo, ON, January 23, 2014 - Open Text Corporation (NASDAQ:OTEX) (TSX: OTC) announced today that its Board of Directors has approved a two-for-one stock split of its outstanding common shares. The two-for-one stock split will be implemented by way of a stock dividend whereby shareholders will receive one common share for each common share held. There were 60,473,680 OpenText common shares outstanding as of January 22, 2014. Adjusting for the stock split, there will be 120,947,360 OpenText common shares outstanding.
The record date for the stock dividend will be February 7, 2014 and the payment date will be February 18, 2014. OpenText’s common shares will be traded in accordance with the “due bill” procedures of the NASDAQ and the Toronto Stock Exchange from February 5, 2014 through February 18, 2014. This means any trades that are executed on the NASDAQ or the Toronto Stock Exchange during this period will be identified to ensure purchasers of OpenText’s common shares receive the entitlement to the stock dividend. OpenText’s common shares are expected to begin trading on a post-stock dividend basis on the NASDAQ and on the Toronto Stock Exchange on February 19, 2014. The due bill redemption date will be February 21, 2014.
OpenText is undertaking the stock split to make the common shares more readily accessible to individual shareholders, increase and broaden OpenText’s shareholder base, and improve the liquidity of the market for OpenText’s common shares.
OpenText shareholders, with or without a physical share certificate, do not need to take any action with respect to the stock dividend because OpenText has moved to a Direct Registration System (DRS). OpenText’s transfer agent will send registered owners of OpenText common shares a DRS advice form, which will represent the additional number of common shares that they are receiving as a result of the stock split. This will allow shareholders to hold their additional common shares in a “book-entry” form without having a physical share certificate issued.
OpenText is ascribing essentially no monetary value to the stock dividend, and the stock dividend will not constitute a taxable transaction for either Canadian tax purposes or U.S. federal income tax purposes. Shareholders are advised to contact their tax advisors for further information. The stock split will not dilute shareholders’ equity. All share and per share data for future periods will reflect the stock split.

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 are considered forward-looking statements or information under applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially. Such factors include, but are not limited to, (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. 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 thereunder; (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. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as

1


of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

United States:

Greg Secord
Vice President, Investor Relations
Open Text Corporation
San Francisco: 415-963-0825
gsecord@opentext.com

Canada:

Sonya Mehan
Senior Manager, Investor Relations
Open Text Corporation
Waterloo: 519-888-7111 ext. 2446
smehan@opentext.com


Copyright ©2014 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.

2