Open Text Corporation Posts Record Results For Fourth-Quarter And Year End Of Fiscal 1999
Open Text Corporation (NASDAQ:OTEX; TSE:OTC), a worldwide leader of Web-based collaborative knowledge management and corporate portal software, today announced record revenues and net income for its fourth quarter and fiscal year ending June 30, 19991.
Net income for the fourth quarter was US$14.0 million, which is $0.54 per share (diluted). Net income before tax adjustments and acquisition related costs was $6.3 million or $0.24 per share, compared to a net income of $2.4 million or $0.13 per share, for the same quarter last year, an increase of 160%. For the full fiscal 1999 year, net income was $20.2 million or $0.85 per share, compared to a loss in fiscal 1998 of $6.3 million. Net income before tax adjustments and acquisition related costs was $17.5 million or $0.74 per share, compared to $2.3 million in the prior year or $0.13 per share, an increase of 655%.
For the fourteenth consecutive quarter, Open Text reported record quarterly revenues. Total revenues for the quarter were $29.4 million, up 17% from the previous quarter and license revenues were $17 million, up 19% from the previous quarter. Revenues for the 1999 fiscal year were $92.5 million, up 104% from the previous year's $45.3 million.
As of June 30, 1999, cash and securities were $186 million or $7.85 per share. The Company has unrealized gains in various investments such as About.com and Deja.com plus other private internet business investments.
"Our strong performance during this past quarter is indicative of our performance throughout the entire fiscal 1999 year. We have continued with the steady execution of our strategy to provide scalable, Web-based enterprise-wide knowledge management solutions to the world's largest corporations," said Tom Jenkins, Chief Executive Officer. "We are pleased to continue to report strong growth in net income and in particular, revenues have grown for the fourteenth consecutive quarter."
New accounts contributing to Open Text's fourth-quarter revenues included Merrill Lynch, Pfizer, Societe Generale, and existing accounts contributing to revenues included Shell Oil, US Navy, Motorola, Siemens among many others.
To review the Statements of Operations and Balance Sheet, please see Financials.
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1 Reported under U.S. Generally Accepted Accounting Principles (GAAP) excluding one time tax adjustment & acquisition related costs.
Acquisitions: In consultation with its Auditors, the Company decided to voluntarily change its prior year accounting valuations with respect to in-process research and development (IPR&D), goodwill and software. Based on the results of the 1998 fiscal year acquisitions and the recently released SEC view on the valuation of acquired assets, the Company decided to restate prior valuations, for consistency and to conform with SEC's guidelines on best accounting practices. This restatement has the impact of increasing the value of the acquired software and goodwill of acquisitions made in the 1998 fiscal year and increasing 1998 net income. As a result of recognizing the increased value of the acquired assets the result of 1998 was improved by $17.3 million or 98 cents per share and the impact on fiscal 1999 and future years is to increase the amortization of goodwill by approximately 1 cent per share per quarter. This restatement does not affect cash. Tax Related Adjustment: Due to the Company's current profitability and outlook for the future, general accepted accounting principles (GAAP) requires that some unrecorded future tax benefits be recognized in the Company's financial statement. A total of $8.6 million was recognized this year. A further $15 million of tax benefits are available for future years. Fiscal Year Retrospective: Progress Against Goals "Two years ago, we articulated a strategy that combined internal growth with acquisitions to achieve our goal of making Open Text the leader in the collaborative knowledge management market. The implementation of this strategy has increased our customer base to more than 3.0 million users in 3,600 organizations," said Jenkins. "Also during fiscal 1999, we brought John Shackleton, a senior operating executive with substantial experience, into the company as President to run operations. John has had a positive impact on our company in terms of preparing it for the future. "The high point of our year was the launch of another major product line - MyLivelink™ - our innovative Corporate Portal strategy. We believe MyLivelink will contribute to our continuing growth and maintain our leadership position."