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Press release from CNW Group

Open Text Reports Second Quarter Fiscal Year 2013 Financial Results

Thursday, January 24, 2013

Open Text Reports Second Quarter Fiscal Year 2013 Financial Results16:01 EST Thursday, January 24, 2013WATERLOO, ON, Jan. 24, 2013 /CNW/ - Open Text(TM) Corporation (NASDAQ:OTEX) (TSX: OTC), announced today its financial results for the second quarter ended December 31, 2012.Financial Highlights for Q2 FY13 (1)Total revenue for the period was $352.2 million, up 10% Y/YLicense revenue was $76.1 million, compared to $89.7 million last yearCloud services revenue was $46.2 millionNon-GAAP-based EPS, diluted was $1.58 compared to $1.39 Y/Y, up 14% Y/Y; GAAP-based EPS, diluted was $1.04 compared to $0.81 Y/Y (2)Non-GAAP-based operating income was $113.0 million and 32.1% of revenues; GAAP-based income from operations was $67.2 million and 19% of revenues (2)Operating cash flow was $74.7 million compared to $44.7 million up 67%Y/Y, with an ending cash balance of $367.3 million."We performed well in the quarter, delivering the highest quarterly revenue, non-GAAP operating margin, and non-GAAP EPS in the Company's history," said OpenText CEO Mark J. Barrenechea.  "We continue to invest in expanding our sales force and building new products, balanced with strong earnings.  I am confident these investments will yield results.""We are committed to leading the market with the broadest range of EIM software and services, both on premise and in the cloud."Business Highlights Financial, services, technology and basic materials industries saw the most demand5 license transactions over $1 million and 11 license transactions between $500K and $1 million in the second quarterCustomer successes in the second quarter include Husch Blackwell Sanders, Defense Logistics Agency, LG&E and KU Services Company, Howard County Maryland, Mitsubishi Electric Information Systems, Sprint and Lincolnshire County CouncilOpenText delivers Enterprise Information Management apps for Windows® 8OpenText offers software trade-in for Autonomy customersLatest release of OpenText Managed File Transfer helps customers reduce information exchange risksOpenText delivers Tempo Social and Tempo Box in the cloudOpenText unveils EIM cloudOpenText announces InfoFusionLeading analyst firm validates OpenText as leader in growing global enterprise fax software and services marketsOpenText expands in India: growing customer base, expanded R&D capacityLeading organizations in India increasingly adopt OpenText's cloud services and solutions to help accelerate growth and revenue        Summary of Quarterly Results        Q2 FY13Q1 FY13Q2 FY12% Change (Q/Q)   % Change (Y/Y)   Revenue (million)$352.2$326.2$321.58.0% 9.6% GAAP-based gross margin65.2%63.0%67.1%220bps(190)bpsGAAP-based operating income margin19.1%12.3%17.2%680bps190bpsGAAP-based EPS, diluted$1.04$0.33$0.81215.2% 28.4% Non-GAAP-based gross margin (2)71.8%70.4%73.8%140bps(200)bpsNon-GAAP-based operating margin (2)32.1%28.7%30.7%340bps140bpsNon-GAAP-based EPS, diluted (2)$1.58$1.31$1.3920.6% 13.7%        Summary of Year to Date Results       Q2 FY13Q1 FY13Q2 FY12 % Change (Y/Y) (bps) Revenue (million)$678.4$326.2$609.5 11.3% GAAP-based gross margin64.1%63.0%66.0% (190)bpsGAAP-based operating income margin15.8%12.3%13.5% 230bpsGAAP-based EPS, diluted$1.37$0.33$1.41 (2.8)% Non-GAAP-based gross margin (2)71.1%70.4%73.0% (190)bpsNon-GAAP-based operating margin (2)30.5%28.7%28.1% 240bpsNon-GAAP-based EPS, diluted (2)$2.89$1.31$2.42 19.4% Conference Call InformationThe 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=701D0000000VhlpIAC .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 7, 2013 and can be accessed by dialing 877-289-8525 (toll-free) or 416-640-1917 (international) and entering the confirmation code: 4588113 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"), 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; and (viii) the demand for the Company's product and the extent of deployment of the company's products in the EIM marketplace. 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)  December 31, 2012June 30, 2012 (unaudited) ASSETS  Cash and cash equivalents$367,258 $559,747 Accounts receivable trade, net of allowance for doubtful accounts of $6,031 as of December 31,2012 and $5,655 as of June 30, 2012168,073 163,664 Income taxes recoverable19,845 17,849 Prepaid expenses and other current assets45,157 44,011 Deferred tax assets14,101 4,003   Total current assets614,434 789,274 Property and equipment83,135 81,157 Goodwill1,212,657 1,040,234 Acquired intangible assets428,361 312,563 Deferred tax assets141,736 115,128 Other assets22,659 23,739 Deferred charges62,095 68,653 Long-term income taxes recoverable12,128 13,545  Total assets$2,577,205 $2,444,293 LIABILITIES AND SHAREHOLDERS' EQUITY  Current liabilities:   Accounts payable and accrued liabilities$177,979 $131,734  Current portion of long-term debt45,136 41,374  Deferred revenues240,347 273,987  Income taxes payable13,037 27,806  Deferred tax liabilities1,203 1,612   Total current liabilities477,702 476,513 Long-term liabilities:   Accrued liabilities19,144 14,247  Deferred credits8,950 10,086  Pension liability25,042 22,074  Long-term debt536,250 555,000  Deferred revenues12,218 12,653  Long-term income taxes payable151,888 147,623  Deferred tax liabilities75,672 26,705   Total long-term liabilities829,164 788,388 Shareholders' equity:   Share capital   58,570,575 and 58,358,990 Common Shares issued and outstanding at December 31, 2012and June 30, 2012, respectively; Authorized Common Shares: unlimited641,684 635,321  Additional paid-in capital92,463 95,026  Accumulated other comprehensive income42,661 44,364  Retained earnings522,605 442,068  Treasury stock, at cost (610,878 and 793,494 shares at December 31, 2012 and at June 30,2012, respectively)(29,074) (37,387) Total shareholders' equity1,270,339 1,179,392  Total liabilities and shareholders' equity$2,577,205 $2,444,293 OPEN TEXT CORPORATIONCONDENSED 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,  2012 2011 2012 2011Revenues:         License $76,125  $89,703  $131,781  $154,731  Cloud services 46,151  —  91,035  —  Customer support 164,658  165,386  326,754  327,383  Professional service and other 65,246  66,367  128,804  127,388   Total revenues 352,180  321,456  678,374  609,502 Cost of revenues:         License 5,331  5,370  9,499  9,368  Cloud services 18,261  —  36,544  —  Customer support 28,277  28,468  54,100  54,737  Professional service and other 47,664  50,604  96,246  100,955  Amortization of acquired technology-based intangible assets 23,191  21,253  46,973  42,043   Total cost of revenues 122,724  105,695  243,362  207,103 Gross profit 229,456  215,761  435,012  402,399 Operating expenses:         Research and development 38,718  42,652  78,624  86,110  Sales and marketing 67,977  68,451  132,492  133,331  General and administrative 30,005  25,126  58,138  50,887  Depreciation 6,105  5,634  12,214  10,892  Amortization of acquired customer-based intangible assets 17,147  13,445  34,399  26,486  Special charges 2,269  5,221  11,823  12,326   Total operating expenses 162,221  160,529  327,690  320,032 Income from operations 67,235  55,232  107,322  82,367 Other income (expense), net 1,541  2,637  1,470  11,949 Interest expense, net (4,515)  (3,607)  (8,883)  (6,393) Income before income taxes 64,261  54,262  99,909  87,923 Provision for income taxes 3,153  6,819  19,372  5,494 Net income for the period $61,108  $47,443  $80,537  $82,429 Earnings per share—basic $1.04  $0.82  $1.38  $1.43 Earnings per share—diluted $1.04  $0.81  $1.37  $1.41 Weighted average number of Common Shares outstanding—basic 58,503  57,846  58,473  57,642 Weighted average number of Common Shares outstanding—diluted 58,983  58,672  58,961  58,647 OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands of U.S. dollars)(unaudited) Three Months Ended December 31, Six Months Ended December 31, 2012 2011 2012 2011Net income for the period$61,108  $47,443  $80,537  $82,429 Other comprehensive income—net of tax:        Net foreign currency translation adjustments(989)  (1,354)  (1,465)  (11,972)  Net unrealized gain (loss) on cash flow hedges(1,453)  3,132  491  (2,070)  Net actuarial gain (loss) relating to defined benefit pension plans(620)  342  (729)  (206) Total other comprehensive income (loss), net, for the period$(3,062)  $2,120  $(1,703)  $(14,248) Total comprehensive income$58,046  $49,563  $78,834  $68,181 OPEN TEXT CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands of U.S. dollars)(unaudited) Three Months Ended December 31, Six Months Ended December 31, 2012 2011 2012 2011Cash flows from operating activities:       Net income for the period$61,108  $47,443  $80,537  $82,429 Adjustments to reconcile net income to net cash provided by operating activities:        Depreciation and amortization of intangible assets46,443  40,332  93,586  79,421  Share-based compensation expense3,174  3,397  6,276  8,241  Excess tax benefits on share-based compensation expense(259)  (163)  (611)  (495)  Pension expense228  169  470  306  Amortization of debt issuance costs535  248  1,072  578  Amortization of deferred charges and credits2,929  2,707  5,858  5,379  Loss on sale and write down of property and equipment22  34  24  203  Deferred taxes(2,013)  7,891  (1,152)  (6,958)  Impairment and other non cash charges—  2,700  —  1,345 Changes in operating assets and liabilities:        Accounts receivable964  (21,681)  20,406  (27)  Prepaid expenses and other current assets(1,640)  2,199  1,384  8,041  Income taxes(18,261)  (12,141)  (13,888)  2,883  Deferred charges and credits—  (5,607)  (436)  (14,653)  Accounts payable and accrued liabilities(365)  4,608  (20,620)  (16,799)  Deferred revenue(18,668)  (24,808)  (36,738)  (57,806)  Other assets497  (2,630)  289  (2,042) Net cash provided by operating activities74,694  44,698  136,457  90,046 Cash flows from investing activities:        Additions of property and equipment(4,879)  (8,785)  (9,917)  (16,687)  Purchase of patents—  (193)  —  (193)  Purchase of System Solutions Australia Pty Limited, net of cashacquired(516)  (1,524)  (516)  (1,524)  Purchase of Operitel Corporation, net of cash acquired—  —  —  (6,260)  Purchase of Global 360 Holding Corp., net of cash acquired—  2,058  —  (245,653)  Purchase of EasyLink Services International Corporation, net of cashacquired—  —  (315,331)  —  Purchase consideration for prior period acquisitions(214)  (335)  (431)  (609) Net cash used in investing activities(5,609)  (8,779)  (326,195)  (270,926)  Cash flows from financing activities:        Excess tax benefits on share-based compensation expense259  163  611  495  Proceeds from issuance of Common Shares2,409  3,424  6,402  11,261  Purchase of Treasury Stock—  —  —  —  Proceeds from long-term debt and revolver—  600,000  —  648,500  Repayment of long-term debt and revolver(7,671)  (332,940)  (15,338)  (333,856)  Debt issuance costs—  (9,309)  —  (9,309) Net cash provided by (used in) financing activities(5,003)  261,338  (8,325)  317,091 Foreign exchange gain (loss) on cash held in foreign currencies941  (2,640)  5,574  (6,440) Increase (decrease) in cash and cash equivalents during the period65,023  294,617  (192,489)  129,771 Cash and cash equivalents at beginning of the period302,235  119,294  559,747  284,140 Cash and cash equivalents at end of the period$367,258  $413,911  $367,258  $413,911 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 December 31, 2012. ($ in thousands except for per share amounts)  Three Months Ended December 31, 2012 GAAP-basedMeasuresAdjustmentsNoteNon-GAAP-basedMeasuresCost of revenues    Cloud services18,261 (30) (1)18,231 Customer Support28,277 (107) (1)28,170 Professional Service and Other47,664 (188) (1)47,476 Amortization of acquired technology-based intangible assets23,191 (23,191) (2)— GAAP-based gross profit/ Non-GAAP-based gross profit229,456 23,516  252,972 Operating Expenses    Research and development38,718 (331) (1)38,387 Sales and marketing67,977 (1,653) (1)66,324 General and administrative30,005 (865) (1)29,140 Amortization of acquired customer-based intangible assets17,147 (17,147) (2)— Special charges2,269 (2,269) (3)— GAAP-based income from operations/ Non-GAAP-based operating income67,235 45,781  113,016 Other income (expense), net1,541 (1,541) (4)— Provision for income taxes3,153 12,037 (5)15,190 GAAP-based net income for the period/ Non-GAAP-based net income61,108 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 expensesas 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 timingand frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysisof operating results.(3) Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special chargesare generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and arehence 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 Otherincome (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative orrelated 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 taxrate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose ofcalculating 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:  Amortization40,338 0.68 Share-based compensation3,174 0.05 Special charges2,269 0.04 Other (income) expense, net(1,541) (0.03) GAAP-based provision for income taxes3,153 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-basedMeasuresAdjustmentsNoteNon-GAAP-basedMeasuresCost of revenues    Cloud services36,544 (30) (1)36,514 Customer Support54,100 (145) (1)53,955 Professional Service and Other96,246 (365) (1)95,881 Amortization of acquired technology-based intangible assets46,973 (46,973) (2)— GAAP-based gross profit/ Non-GAAP-based gross profit435,012 47,513  482,525 Operating Expenses    Research and development78,624 (669) (1)77,955 Sales and marketing132,492 (3,319) (1)129,173 General and administrative58,138 (1,748) (1)56,390 Amortization of acquired customer-based intangible assets34,399 (34,399) (2)— Special charges11,823 (11,823) (3)— GAAP-based income from operations/ Non-GAAP-based operating income107,322 99,471  206,793 Other income (expense), net1,470 (1,470) (4)— Provision for income taxes19,372 8,335 (5)27,707 GAAP-based net income for the period/ Non-GAAP-based net income80,537 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 expenseis 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 ofamortization 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 generallyincurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internalanalysis 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 arehence 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-basedadjusted net income.(6) Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:  Six Months Ended December 31, 2012  Per shareNon-GAAP-based net income$170,203 $2.89 Less:  Amortization81,372 1.38 Share-based compensation6,276 0.11 Special charges11,823 0.20 Other (income) expense, net(1,470) (0.02) GAAP-based provision for income taxes19,372 0.33 Non-GAAP based provision for income taxes(27,707) (0.48) GAAP-based net income$80,537 $1.37 Reconciliation of selected GAAP-based measures to Non-GAAP based measures for the three months ended September 30, 2012. ($ in thousands except for per share amounts)  Three Months Ended September 30, 2012 GAAP-basedMeasuresAdjustmentsNoteNon-GAAP-basedMeasuresCost of revenues    Customer Support25,823 (38) (1)25,785 Professional Service and Other48,582 (177) (1)48,405 Amortization of acquired technology-based intangible assets23,782 (23,782) (2)— GAAP-based gross profit/ Non-GAAP-based gross profit205,556 23,997  229,553 Operating Expenses    Research and development39,906 (338) (1)39,568 Sales and marketing64,515 (1,666) (1)62,849 General and administrative28,133 (883) (1)27,250 Amortization of acquired customer-based intangible assets17,252 (17,252) (2)— Special charges9,554 (9,554) (3)— GAAP-based income from operations/ Non-GAAP-based operating income40,087 53,690  93,777 Other income (expense), net(71) 71 (4)— Provision for income taxes16,219 (3,702) (5)12,517 GAAP-based net income for the period/ Non-GAAP-based net income19,429 57,463 (6)76,892 GAAP-based earnings per share/ Non GAAP-based earnings per share-diluted$0.33 $0.98 (6)$1.31 (1) Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expensesas 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 timingand frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysisof operating results.(3) Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special chargesare generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and arehence 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 Otherincome (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative orrelated 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 45% and a non-GAAP-basedtax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purposeof calculating non-GAAP-based adjusted net income.(6) Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income: Three Months Ended September 30, 2012  Per shareNon-GAAP-based net income$76,892 $1.31 Less:  Amortization41,034 0.70 Share-based compensation3,102 0.05 Special charges9,554 0.16 Other (income) expense, net71 — GAAP-based provision for income taxes16,219 0.28 Non-GAAP based provision for income taxes(12,517) (0.21) GAAP-based net income$19,429 $0.33 Reconciliation of selected GAAP-based measures to Non GAAP-based measures for the three months ended December 31, 2011. ($ in thousands except for per share amounts)  Three Months Ended December 31, 2011 GAAP-basedmeasuresAdjustmentsNoteNon-GAAP-basedmeasuresCost of Revenues:    Customer Support28,468 (34) (1)28,434 Professional Service and Other50,604 (106) (1)50,498 Amortization of acquired technology-based intangible assets21,253 (21,253) (2)— GAAP-based gross profit/ Non-GAAP-based gross profit215,761 21,393  237,154 Operating Expenses    Research and development42,652 (768) (1)41,884 Sales and marketing68,451 (1,676) (1)66,775 General and administrative25,126 (813) (1)24,313 Amortization of acquired customer-based intangible assets13,445 (13,445) (2)— Special charges5,221 (5,221) (3)— GAAP-based income from operations/ Non-GAAP-based operating income55,232 43,316  98,548 Other income (expense), net2,637 (2,637) (4)— Provision for income taxes6,819 6,472 (5)13,291 GAAP-based net income for the period/ Non-GAAP-based net income47,443 34,207 (6)81,650 GAAP-based earnings per share/ Non GAAP-based earnings per share-diluted$0.81 $0.58 (6)$1.39 (1)Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expensesas 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 timingand frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysisof operating results.(3) Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special chargesare generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and arehence 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 Otherincome (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative orrelated 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 13% and a non-GAAP-basedtax 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, 2011  Per shareNon-GAAP-based net income$81,650 $1.39 Less:  Amortization34,698 0.59 Share-based compensation3,397 0.06 Special charges5,221 0.09 Other (income) expense, net(2,637) (0.04) GAAP-based provision for income taxes6,819 0.12 Non-GAAP based provision for income taxes(13,291) (0.24) GAAP-based net income$47,443 $0.81 Reconciliation of selected GAAP-based measures to Non GAAP-based measures for the six months ended December 31, 2011. ($ in thousands except for per share amounts)  Six Months Ended December 31, 2011 GAAP-basedmeasures  Adjustments  NoteNon-GAAP-basedmeasuresCost of Revenues:    Customer Support54,737 (58) (1)54,679 Professional Service and Other100,955 (205) (1)100,750 Amortization of acquired technology-based intangible assets42,043 (42,043) (2)— GAAP-based gross profit/ Non-GAAP-based gross profit402,399 42,306  444,705 Operating Expenses    Research and development86,110 (1,844) (1)84,266 Sales and marketing133,331 (3,446) (1)129,885 General and administrative50,887 (2,687) (1)48,200 Amortization of acquired customer-based intangible assets26,486 (26,486) (2)— Special charges12,326 (12,326) (3)— GAAP-based income from operations/ Non-GAAP-based operating income82,367 89,095  171,462 Other income (expense), net11,949 (11,949) (4)— Provision for income taxes5,494 17,615 (5)23,109 GAAP-based net income for the period/ Non-GAAP-based net income82,429 59,531 (6)141,960 GAAP-based earnings per share/ Non GAAP-based earnings per share-diluted$1.41 $1.01 (6)$2.42 (1) Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expensesas 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 timingand frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysisof operating results.(3) Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special chargesare generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and arehence 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 Otherincome (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative orrelated 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 6% and a non-GAAP-basedtax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purposeof 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, 2011  Per shareNon-GAAP-based net income$141,960 $2.42 Less:  Amortization68,529 1.17 Share-based compensation8,240 0.14 Special charges12,326 0.21 Other (income) expense, net(11,949) (0.20) GAAP-based provision for income taxes5,494 0.10 Non-GAAP based provision for income taxes(23,109) (0.41) GAAP-based net income$82,429 $1.41 (3) The following table provides a composition of our major currencies for revenue and expenses, expressed as apercentage, for the three and six months ended December 31, 2012: Three Months Ended December 31, 2012  Currencies % of Revenue% of Expenses*EURO26%16%GBP8%8%CAD6%19%USD48%43%Other12%14%Total100%100% Six Months Ended December 31, 2012Currencies % of Revenue % of Expenses*EURO25%16%GBP8%8%CAD6%18%USD49%44%Other12%14%Total100%100%*Expenses include all cost of revenues and operating expenses included within the Consolidated Statements of Income, exceptfor amortization of intangible assets, share-based compensation and Special charges.SOURCE: Open Text CorporationFor further information: United States:Greg Secord Vice President, Investor Relations Open Text Corporation San Francisco: (415) 963-0825 New York: (646) 843-5621gsecord@opentext.comCanada:Sonya Mehan Senior Manager, Investor Relations Open Text Corporation 519-888-7111 ext. 2446smehan@opentext.com