Open Text on Q4 and FY2009 Financials, Vignette's Fate

Enterprise CMS provider Open Text (news, site) announced unaudited financial results for Q4 and FY2009.

Despite the current economic climate, OTEX reports achieving bottom line target, although net income for fiscal year 2009, and license revenue and operating cash flow in the fourth quarter have dipped.

Conversations on Vignette's fate and product integration strategies are ongoing.

More on the Dollar Figures

Total revenue for the fourth quarter was US$ 203.4 million, up 2% compared to US$ 200.3 million for the same period in 2008. Total revenue for fiscal year 2009 was US$ 785.7 million, up 8% compared to US$ 725.5 million for the previous fiscal year.

License revenue in the fourth quarter was US$ 63.0 million, down 8% compared to US$ 68.2 million in the fourth quarter of the prior fiscal year. License revenue for fiscal year 2009 was US$ 229.8 million, up 5% compared to US$ 219.1 million in the previous fiscal year.

Adjusted net income in the quarter was US$ 39.2 million or US$ 0.73 per share on a diluted basis, up 18% compared to US$ 33.3 million or US$ 0.63 per share on a diluted basis for the same period in the prior fiscal year. Adjusted net income for fiscal year 2009 was US$ 132.8 million, or US$ 2.49 per share on a diluted basis, up 24% compared to adjusted net income for the previous fiscal year of US$ 107.0 million, or US$ 2.03 per share on a diluted basis.

GAAP net income was US$ 19.5 million or US$ 0.36 per share on a diluted basis, down 28% compared to US$ 27.3 million or US$ 0.51 per share on a diluted basis for the same period in the prior fiscal year. GAAP net income for 2009 was US$ 56.9 million, or US$ 1.07 per share on a diluted basis, compared to the prior fiscal year's net income of US$ 53.0 million, or US$ 1.01 per share on a diluted basis.

For more information on Q4 and FY 2009, go straight to the source.

As far as future goes, the company remains optimistic, basing their positive outlook on the demand for compliance-based solutions in the market.

On Vignette’s Future

Acquisitions always seem to be part of any conversation around Open Text. During Q4, the company acquired digital media, 3D applications makers Vizible for an undisclosed sum to expand its portfolio of digital media applications. There are no details yet as to what Open Text plans to really do with the eye candy that Vizible is.

Finalized in July of this year, the acquisition of Web CMS vendor Vignette and its positioning in Open Text is starting to look less nebulous.

John Shackleton, president and CEO of Open Text, said, "We are pleased with how the acquisition is progressing and to date the integration is tracking to plan." While also adding “I am disappointed that we were slightly off on our Q4 revenue targets, mainly due to the WCM delays where customers were waiting to see our new WCM strategy with the announcement of the Vignette acquisition.”

Vignette’s prior (not very promising) financial behavior and miscellaneous struggles are playing a role in Open Text’s balance sheet.

According to Open Text’s CFO Paul McFeeters, “As part of acquisition accounting, we will fair value the acquired deferred revenue for customer support contracts…  However, I expect the range of this adjustment to be between US$ 6 million and US $ 8 million for the first year of operations. While we will not break out the financial effect of the acquired Vignette business, I will remind you that they were operating at a breakeven margin. We expect this acquisition to be neutral to the operations in Q2, accretive in Q3, and on our operating model by the end of this fiscal year.”

In addition to that, Open Text plans to cut Vignette’s worldwide workforce (layoffs wouldn't be for the first time) and “continue to rationalize facilities in both Open Text and Vignette. ” Open Text and Vignette restructuring charge will be approximately US$ 32 million to US$ 40 million. How many jobs is that?

It would be reasonable to expect that Vignette and former RedDot (now, Open Text Web Solutions) will be merging in some way or another. With  Vignette, most likely, taking the upper hand. The detailed roadmap and product integration strategies should be announced in October at the North American Content World Conference in Orlando, FL.