Open Text Corporation Reports Fourth-Quarter and Full-Year 1997 Results
Company Meets Benchmark Goals Set One Year Ago
Waterloo, ON - 1997-08-26 - Open Text
Corporation (NASDAQ: OTEX), a leading provider of intranet application
software, tools and services, today announced its financial results for the
fourth quarter and fiscal year ended June 30, 1997.
For the sixth consecutive quarter, Open Text reported the highest quarterly
total revenues in the company's history. Total revenues for the fourth
quarter of fiscal 1997 were US$7.3 million, up 19 percent from the $6.1
million reported for the third quarter, and up 95 percent from $3.7 million for
the year-earlier period.
Gross profit for the fourth quarter was also a record high at $5.2 million, up
21 percent from $4.3 million for the third quarter, and up 228 percent from
$1.6 million a year ago. Fourth-quarter gross margin was 71 percent, up
from 42 percent for the fourth quarter of 1996.
Net loss for the fourth quarter was $2.3 million, or a loss of $0.14 per
share. This compared with a net loss of $3.5 million, or a loss of $0.20 per
share, for the third quarter, and a net loss of $5.6 million, or a loss of $0.35
per share, for the year-earlier quarter, exclusive of several one-time
charges related primarily to acquisitions and a restructuring of operations.
Including these charges, the net loss for the fourth quarter of fiscal 1996
was $15.5 million, or a loss of $0.96 per share.
For the full year ended June 30, 1997, total revenues were $22.6 million,
more than double the $10.0 million reported for fiscal 1996. Gross profit
was $15.2 million, also more than double the $6.2 million reported for the
prior year. Net loss was $13.2 million, or a loss of $0.78 per share,
compared with a net loss of $11.6 million, or $0.96 per share, for the year
earlier, exclusive of the one-time charges mentioned above. Including these
charges, the full-year fiscal 1996 net loss was $43.2 million, or a loss of
$3.59 per share.
At June 30, 1997, Open Text's cash, cash equivalents and short-term
investments totaled approximately $32 million. Accounts receivable were
$8.6 million on quarterly revenues of $7.3 million. Total shareholders'
equity, or net book value, was $42.5 million.
One-Year Retrospective: Progress Against Goals
"One year ago, after a series of strategic acquisitions, we focused Open
Text as an intranet application software provider," said Tom Jenkins, chief
executive officer. "At that time, we set a number of benchmarks by which
to measure our progress over time. These benchmarks included revenue
growth, gross profit growth, quantity and quality of customers, strategic
partnerships, market share, and recognized industry leadership. We
believe that we have achieved all of our goals."
Jenkins went on to cite the following specific achievements during fiscal
1997:
- Quarterly revenue growth averaging 18 percent sequentially
- Annual revenue growth of 127 percent
- Quarterly gross profit growth averaging 35 percent sequentially
- Annual gross profit growth of 145 percent
- A direct customer base of approximately 120 Global 2000 companies, including Bell Canada; BellSouth; Booz, Allen and Hamilton; Chiron; Conoco; Ford; Hewlett-Packard; Motorola; Qualcomm; TRW; and Tracor/Vitro, as well as the U.S. Government Strategic partnerships with Canon, Jetform, Microsoft, Netscape, and Siemens-Nixdorf
- A total of approximately 240,000 seats sold for Livelink Intranet, from start-up in the fourth quarter of fiscal 1996 -- a record for first-year market penetration in the history of document management software
- International Data Corporation's (IDC) naming of Livelink Intranet as the market leader for Web-enabled, integrated document management systems, with 64-percent market share at the end of calendar 1996
- Delphi Consulting Group's recognition of Open Text as the leader in market development for electronic document management, with 248-percent revenue growth during calendar 1996.
Fourth-Quarter Highlights
For the fifth consecutive quarter since Open Text introduced the Livelink Intranet suite, sequential revenue growth was driven by increasing intranet software sales. Fourth-quarter license and service revenues associated with Livelink Intranet rose 21 percent from the third quarter.
License revenues for the quarter ended June 30, 1997 were $4.7 million, up 26 percent from $3.8 million for the third quarter, and up 88 percent from $2.5 million for the fourth quarter of 1996.
Excluding sales of the retail Internet software product line that was terminated at the end of fiscal 1996, intranet software license revenues for the fourth quarter grew 175 percent from the year-earlier quarter.
Service revenues for the quarter ended June 30, 1997 were $2.5 million, up 8 percent from $2.4 million for the third quarter, and up 107 percent from $1.2 million for the fourth quarter of 1996.
Gross margin on license revenues for the fourth quarter was 95 percent of total license revenues, compared with 93 percent for the third quarter, and with 49 percent for the fourth quarter of 1996. Gross margin on service revenues for the fourth quarter was 27 percent of total service revenues, compared with 33 percent for the third quarter, and with 29 percent for the fourth quarter of 1996.
The major new accounts contributing to Open Text's fourth-quarter revenues included United Airlines, Glaxo Wellcome, NationsBank, William M. Mercer, Thompson Financial and Adobe Systems. Existing accounts included Bell Sygma, Ford and Qualcomm.
New accounts announced during the fourth quarter included Booz, Allen and Hamilton; Motorola; and TRW Systems Integration Group, a major contractor with the U.S. Department of Defense. Also during the quarter, Netscape and Open Text announced plans to bundle Livelink Intranet with Netscape SuiteSpot Server Software for Web-based document management accessible directly through Netscape Communicator Client Software. According to Open Text CEO Tom Jenkins, this is potentially one of the largest bundling arrangements in the history of document management software.
Release Disclaimer
This news release may contain forward-looking statements relating to the future performance of Open Text Corporation. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the company's filings with the Securities and Exchange Commission (SEC), including the final prospectus for the company's initial public offering of common stock in January 1996, Form 10-K for the year ended June 30, 1997, and Form 10-Q for the quarters ended September 30, 1997, and December 31, 1997. To review the Statements of Operations and Balance Sheet please see Financials. Note to Editors: Livelink Pinstripe, Livelink 8, Livelink Search, Livelink Library, Livelink Workflow and Livelink Project Collaboration are trademarks of Open Text Corporation. All other trademarks are the property of their respective companies.
