Open Text Corporation Reports First-Quarter Fiscal 1998 Results
Waterloo, ON –
Corporation (NASDAQ: OTEX), a leading provider of intranet-based
knowledge management application software and services, today
announced its financial results for the first quarter ended September 30,
For the seventh consecutive quarter, Open Text reported the highest quarterly total revenues in the company's history. Total revenues for the quarter were US$7.7 million, up 6 percent from the $7.3 million reported for the fourth quarter, and up 90 percent from $4.0 million for the year-earlier period.
Gross profit for the first quarter was also a record high at $5.5 million, up 7 percent from $5.2 million for the fourth quarter, and up 131 percent from $2.4 million a year ago. First-quarter gross margin was 72 percent, up from 59 percent for the first quarter of fiscal 1997.
Net loss for the first quarter was $1.5 million, or a loss of $0.08 per share. This compared with a net loss of $2.3 million, or a loss of $0.14 per share, for the fourth quarter, and a net loss of $2.9 million, or a loss of $0.18 per share, for the year-earlier quarter, excluding a charge of $650,000 for termination costs related to the company's restructuring of operations. Including this charge, the net loss for the first quarter of fiscal 1997 was $3.6 million, or a loss of $0.22 per share.
At September 30, 1997, Open Text's cash, cash equivalents and short-term investments totaled approximately $30 million. Accounts receivable were $9.6 million, on quarterly revenues of $7.7 million. Total shareholders' equity, or net book value, was $40.9 million.
Blue-Chip Companies Continue to Choose Livelink Intranet
"We are pleased that Global 2000 Companies continue to choose Livelink Intranet for the development and implementation of highly scalable, collaborative knowledge management applications on their intranets, " said Tom Jenkins, chief executive officer. "During the quarter, we began shipping Livelink Intranet 7.2, an enhanced version of our product suite which provides higher security and scalability, as well as increased support for industry-standard servers and browsers.
"The first fiscal quarter is the toughest for sustaining sequential revenue growth in this industry," Jenkins continued. "In light of this yearly trend, first-quarter performance was quite positive."
The major new accounts contributing to Open Text's first-quarter revenues included Newbridge Networks, Otis Elevator, Sprint Corporation, Symbol Technologies and Warburg Pincus. Existing accounts contributing to revenues included Conoco, Ford, Motorola, Siemens, United Airlines and many others.
Recently, Open Text's Livelink Intranet was chosen by the Central Secretariat of the International Organization for Standardization (ISO) to streamline the development of new international standards and by the Standards Council of Canada (SCC) to manage its internal ISO 9000 quality management system.
During the quarter, Open Text also strengthened its management team with the addition of Oracle executive Brett Newbold as president. Newbold, who was most recently vice president of Oracle's ConText Division, brings to Open Text nearly 20 years of management experience in the software industry, especially in large-scale text retrieval and document management systems.
- For the sixth consecutive quarter since Open Text introduced the Livelink Intranet suite, intranet software and service sales drove sequential revenue growth.
- License revenues for the quarter ended September 30, 1997 were $4.4 million, compared with $4.7 million for the fourth quarter, and with $2.1 million for the first quarter of 1996.
- Service revenues for the first quarter ended September 30, 1997 were $3.3 million, compared with $2.5 million for the fourth quarter, and up from $1.9 million for the first quarter of fiscal 1997. Service revenues contributed to continued improvement in gross margin, which more than offset the modest sequential decrease in higher-margin license revenues.
- Gross margin on license revenues for the first quarter was 95 percent, even with 95 percent for the fourth quarter, and up from 91 percent for the year-ago quarter. Gross margin on service revenues for the first quarter was 41 percent, up from 27 percent for the fourth quarter and 24 percent a year earlier.