Press Releases Details

Waterloo, ON - 2007-02-08 - Open Text Corporation (NASDAQ:OTEX) (TSX:OTC), a leading provider of Enterprise Content Management (ECM) software, today reported unaudited financial results for its second quarter that ended December 31, 2006. (1)

Total revenue for the second quarter was $163.3 million, compared to $110.8 million for the same period in the prior fiscal year. License revenue in the second quarter was $51.4 million, compared to $37.1 million for the same period in the prior fiscal year. (2)

Adjusted net income in the quarter was $18.0 million or $0.35 per share on a diluted basis, compared to $15.4 million or $0.31 per share on a diluted basis for the same period in the prior fiscal year. Net income in accordance with U.S. generally accepted accounting principles ( US GAAP ) was $2.3 million or $0.04 per share on a diluted basis, compared to $2.7 million or $0.05 per share on a diluted basis for the same period in the prior fiscal year. Net income in accordance with US GAAP was primarily impacted by restructuring charges and interest costs. (3)

The cash, cash equivalents and short-term investments balance as of December 31, 2006 was $124.4 million, compared to $111.2 million as of September 30, 2006. Accounts receivable at the end of the second quarter totaled $114.1 million, compared to $76.7 million in the prior quarter. Days Sales Outstanding (DSO) was 63 days in the second quarter of fiscal 2007, compared to 68 days in the prior quarter.

Operating cash flow in the second quarter of fiscal 2007 was $31.4 million compared to $16.4 million in the second quarter of fiscal 2006.

We achieved our profit targets and generated strong cash flow from operations this quarter, said John Shackleton, President and Chief Executive Officer of Open Text. "We are pleased with how the Hummingbird integration is progressing and we are on track to meet our operating goals.

Hummingbird Integration
The majority of Hummingbird s integration was completed during the second quarter. As part of the integration, Open Text has reduced its worldwide workforce by approximately 15 percent. The staff reductions were focused on redundant positions or areas of the business that were not consistent with the Company s strategic focus. Open Text is also reducing 40 facilities by closing or consolidating offices in certain locations. To date, 19 facilities have been closed or consolidated in accordance with this plan.

We are pleased that the acquisition was accretive in the first quarter of combined operations and have been successful in our efforts to rationalize staff levels and consolidate facilities to meet our operating goals. Based on the run-rate in our second quarter, we continue to believe our actions will result in savings of approximately $50.0 million for the current fiscal year and on an annualized basis, approximately $80.0 million beginning in fiscal 2008, said Paul McFeeters, Chief Financial Officer of Open Text. (4)

Teleconference Call

Open Text will host a conference call on February 8, 2007 at 5:00 p.m. ET to discuss the final financial results of its second quarter.

Date: February 8, 2007
Time: 5:00 p.m. ET/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 February 8, 2007 at 7:00 p.m.ET through 11:59 p.m. on February 22, 2007 and can be accessed by dialing 416-640-1917 and using pass code 21215721#.

For more information or to listen to the call via Web cast, please use the following link: http://www.opentext.com/investor/investor_events/.

Open Text is the world's largest independent provider of Enterprise Content Management software. The Company's solutions manage information for all types of business, compliance and industry requirements in the world's largest companies, government agencies and professional service firms. Open Text supports approximately 46,000 customers and millions of users in 114 countries and 12 languages. For more information about Open Text, visit www.opentext.com.

This press release contains forward-looking statements, including statements about the financial conditions, results of operations and earnings and revenue outlook for Open Text Corporation ( Open Text or the Company ). Forward-looking statements in this press release are not promises or guarantees of future performance and are subject to risks and uncertainties that could cause the Company's 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. The results included in this press release are unaudited and therefore are deemed to be forward-looking statements. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: (i) the future performance, financial and otherwise, of Open Text; (ii) the ability of Open Text to bring new products to market and to increase profits; (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 ECM market; (vi) the Company's competitive position in the ECM 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 ECM 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 thereunder; (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; (ix) demand for the Company's products; and (x) other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K for the year ended June 30, 2006. 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 obligation to update forward-looking statements should circumstances or management's beliefs or opinions change.

Notes
(1) Based on comparison of historic revenue figures publicly disseminated by companies in the ECM sector. All dollar amounts in this press release are in millions of US Dollars unless otherwise indicated (except for share data). (2) In addition to these GAAP and adjusted results the Company has provided financial information that adds-back maintenance revenue eliminated due to the impact of purchase accounting entries on deferred revenue and the impact of interest expense. These adds-back have been made since management believes that the adding back of these adjustments will provide a consistent basis for comparison between quarters and will be more indicative of Open Text s underlying operating results.

Paul McFeeters
Chief Financial Officer
Open Text Corporation
+1-905-762-6121
pmcfeeters@opentext.com

Greg Secord
Open Text Corporation
+1-519-888-7111 ext.2408
gsecord@opentext.com