Open Text Corporation

Open Text Corporation

January 05, 2005 16:14 ET

Open Text Preliminary Results Exceed Expectations




JANUARY 5, 2005 - 16:14 ET

Open Text Preliminary Results Exceed Expectations

WATERLOO, ONTARIO--(CCNMatthews - Jan. 5, 2005) - Open Text™
Corporation (TSX:OTC)(Nasdaq:OTEX), the world's largest provider of
enterprise content management (ECM) software, today announced
preliminary results for its second quarter that ended December 31, 2004.

Based on preliminary financial data for its second quarter of fiscal
2005, Open Text expects to report total revenue in the range of $110.0
to $113.0 million, the highest quarterly revenue ever reported by the
Company. License revenue is expected to be in the range of $40 to $43
million for the quarter. Adjusted Net Income for the quarter is
estimated to be $14 million to $16 million and earnings per share (EPS)
on an adjusted basis is expected to be $0.26 to $0.30 for the quarter.
GAAP Net Income for the quarter is expected to be $9 million to $11
million, and GAAP EPS is expected to be $0.17 to $0.21. (2)

"Our second quarter results demonstrate that the IXOS integration
continues to be on track and we are experiencing strong demand from the
cross selling of Open Text and IXOS products," stated Tom Jenkins, Open
Text's CEO. "With these results we have demonstrated that Open Text can
achieve strong growth, while maintaining our position as a profitable

The Company emphasized that the results are unaudited and preliminary,
and its actual results may vary, perhaps materially. Open Text will
provide further information about the quarter and update guidance for
the remainder of the fiscal year when the final results for the second
quarter are reported by the Company on February 8, 2005 at 5:00 pm EDT.

Teleconference Call

Open Text will host a conference call on January 5, 2005 at 5:00 p.m.
EDT to discuss its preliminary financial results.

Date: Wednesday, January 5, 2005
Time: 5:00 p.m. EDT/2:00 p.m. PT
Length: 60 minutes
Where: 416-640-1907

Please dial-in approximately 10 minutes before the teleconference is
scheduled to begin. A replay of the call will be available beginning
January 5, at 7:00 p.m. EDT through 11:59 p.m. on January 19, 2005 and
can be accessed by dialing 416-640-1917 and using pass code 21108004.

For more information or to listen to the call via Web cast, please use
the following link:

About Open Text

Open Text™ is the market leader in providing Enterprise Content
Management (ECM) solutions that bring together people, processes and
information in global organizations. Throughout its history, Open Text
has matched its tradition of innovation with a track record of financial
strength and growth. Today, the company supports more than 17 million
seats across 13,000 deployments in 67 countries and 12 languages
worldwide. For more information on Open Text, go to:

Forward-looking statements in this press release regarding the Company's
total revenue, license revenue, EPS on an adjusted basis, and EPS on a
GAAP basis for the fiscal quarter ended December 31, 2004, are not
promises or guarantees and are subject to risks and uncertainties that
could cause our actual results to differ materially from those
anticipated. The Company cautions you not to place undue reliance upon
any such forward-looking statements, which speak only as of the date
made. Forward-looking statements relate to, among other things, the
future performance of Open Text, the benefits of any acquisition, the
strength of the Company's pipeline, the Company's growth and
profitability prospects, the potential for growth in the ECM market and
its estimated size, the Company's position in the market and future
opportunities therein, the benefits of the Company's products to be
realized by customers, the demand for and the extent of deployment of
the Company's products. 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, among others, risks involved in the
completion and integration of acquisitions, the possibility of
fluctuations in currency exchange rates, the possibility of technical,
logistical or planning issues in connection with deployments, the
continuous commitment of the Company's customers, demand for the
Company's products and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission (SEC),
including the Company's Form 10-K for the year ended June 30, 2004.
Forward-looking statements are based on management's beliefs and
opinions at the time the statements are made, and the Company does not
undertake any obligations to update forward-looking statements should
circumstances or management's beliefs or opinions change.

Copyright (C) 2005 by Open Text Corporation. LIVELINK, LIVELINK
MEETINGZONE, and OPEN TEXT are trademarks or registered trademarks of
Open Text Corporation in the United States of America, Canada, the
European Union and/or other countries. This list of trademarks is not
exhaustive. Other trademarks, registered trademarks, product names,
company names, brands and service names mentioned herein are property of
Open Text Corporation or other respective owners.


(1) Based on comparison of future annual revenue guidance publicly
disseminated by companies in the Enterprise Content Management ("ECM")
sector. All dollar amounts in this press release are in US Dollars
unless otherwise indicated.

(2) Use of Non-GAAP financial measures

The non-GAAP financial measures used in this press release are not
prepared in accordance with US GAAP and may be different from non-GAAP
financial measures used by other companies. The Company uses the
financial measure adjusted EPS and adjusted net income to supplement its
consolidated financial statements, which are presented in accordance
with US GAAP. The presentation of adjusted EPS and adjusted net income
is not meant to be a substitute for net income per share presented in
accordance with GAAP, but rather should be evaluated in conjunction with
such GAAP measure. Adjusted EPS and adjusted net income are calculated
as net income (or per share on a fully diluted basis, as applicable),
excluding the following estimated amounts (a) the amortization of
acquired intangible assets (Q2FY05 - $4.6 million), (b) other income,
gain (loss) on investments (nil), (C) income tax on equity gain (nil),
and (d) restructuring charges including charges that will be incurred as
a result of the acquisition of IXOS (nil). All of the aforementioned
amounts are provided net of tax and extraordinary gains or losses. The
term adjusted EPS and adjusted net income does not have a standardized
meaning prescribed by GAAP, and therefore the Company's definition is
unlikely to be comparable to similar measures presented by other
companies. The Company's management believes that the presentation of
adjusted EPS and adjusted net income provides useful information to
investors because it excludes non-operational charges and is a better
indication of Open Text's profitability or expected profitability from
recurring operations. The items excluded from the computation of
adjusted EPS and adjusted net income, which are otherwise included in
the determination of net income per share prepared in accordance with
GAAP, are items that Open Text does not consider to be meaningful in
evaluating the Company's past financial performance or future prospects
and may hinder a comparison of its period-to-period profitability.

The following chart provides reconciliation (unaudited) of GAAP based
EPS to non-GAAP EPS estimates for the three months ended December 31,
2004. EPS has been calculated on a fully diluted basis.

Low end of the range High end of the range
GAAP based EPS $0.17 $0.21
Amortization of intangibles
net of taxes $0.09 $0.09
Non-GAAP EPS $0.26 $0.30


Contact Information

    Open Text Corporation
    Greg Secord
    Director, Investor Relations
    +1-519-888-7111 ext.2408
    Open Text Corporation
    Anne Marie Rahm
    Director, Investor Relations
    Open Text Corporation
    Alan Hoverd
    Chief Financial Officer