Open Text Q4 2003 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Abramsky - Canaccord Capital - Analyst : Hi, guys. Great quarter and congratulations. On the F '04 outlook, could you just give us a little bit of color on what maybe some of your assumptions -- how saturated or unsaturated is the health-care pharma sectors and government sector? I noticed you did not mention education yet with (indiscernible). Are you expecting some growth and traction there? And what about some of the support for the Livelink platform in '04 related to your assumptions versus the vertical solutions that you have?

Question: Scott Penner - TD Newcrest - Analyst : Thanks. Tom, with the 90 percent maintenance renewal rate and the new targeted applications and such a large installed base, I'm always somewhat surprised that 74 percent of the license revenue is from new customers. Maybe you could just kind of go over how you define those new customers and sort of the purchasing cycles of the installed base?

Question: Blair Abernethy - Paradigm Capital - Analyst : Thank you. Nice quarter, gentlemen. Just wanted to question you a bit on your sales reps right now. John, could you just give us some detail as to where you are at geographically, and also in terms of who is selling some of the new products acquired?

Question: Paul Steep - Orion Securities - Analyst : Good quarter. Could you just please give me a quick update. You broke out, Alan, on the license side, just the service and maintenance that came from I guess core change and Eloquent into the current quarter?

Question: Jeff Fan - UBS Warburg - Analyst : Thank you very much and a good quarter. Question regarding the competition. Tom, you mentioned versus some of your closest competitors, you guys grew it very -- rates that are much higher. Could you talk about maybe the win rate that you're seeing, that you guys are keeping track of? I think in the past, you guys have mentioned a 3-to-1 win rate. Can you comment where that is now, at least on the directional basis? I am assuming it is up.

Question: Brad Whitt - Southwest Securities - Analyst : Could you comment on what were some of the key drivers of the service business this quarter that was up quite a bit? Also, the gross margins around that service business -- if you would expect room for improvement there?

Question: Richard Tse - Merrill Lynch - Analyst : On the acquisition front, what kind of area of the technology portfolio are you guys missing, now that you have portals of Core Change, you've got rich media with Eloquent? Is there anything else that you're kind of missing or you're going to be focusing on just integrating these acquisitions over the course of the next year?

Question: Scott Preston - Research Capital - Analyst : Good morning, and good quarter, guys. Actually, if I could just follow-up with that, Tom. Could you talk about a little bit more about how you see Open Text playing in this consolidation phase we've been seeing in the software sector. And I know you guys have really done a great job of putting together a pretty good and broad product suite, but do you think you guys have enough scale and are you large enough to compete with what is becoming much bigger and stronger software companies with a lot of global brand and scale?

Question: Mark Schappel - McDonald Investments - Analyst : Hi, guys, good job on the quarter. Just real quick, a couple of questions. For the '04 year, as far as modeling for the license service mix going forward, how should we think about that?

Question: David Shore - Desjardins Securities - Analyst : Thanks, congratulations, guys. John, could you talk about little bit more about product development, what we're going to see coming out as you've integrated several of these acquisitions? Next major leases, things like that?

Question: Byron Berry - National Bank Financial - Analyst : This is Mark (indiscernible) for Byron Berry. In terms of your guidance, quick (indiscernible) calculation. Looks like you're looking for about a 19.5 percent pretax margin, which is pretty strong historically, although compared to Q4, it's actually down a bit from about 22 percent. Where do you see the differences coming from historically, and compared to the previous quarter?

Question: Peter Misek - Scotia Capital - Analyst : Good morning, gentlemen. I have a question first, Alan, for you on deferred tax asset valuation reserve. It did not come in the press release, but did you guys increase the reserve for tax assets in the quarter? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

Question: Bert Powell - BMO Nesbitt Burns - Analyst : Alan, can you give us the sales impact for 4X (ph) in the quarter, as well as bottom-line impact, what your assumptions are for the '04 guidance? And also just quickly if you could clarify the 4 percent growth, the acquisitions, are you just talking just Eloquent and Core Change, or are you also including (indiscernible) Trinity?

Question: Scott Kessler - Standard & Poors - Analyst : Thank you very much. Two quick questions. First, can you tell us what your most significant verticals were in the quarter, in terms of percentage of revenues? And second, could you talk a little bit about the acquisition pipeline, in terms of values that you're seeing and perhaps the number of transactions that you might be considering? Obviously, I don't' need to know the specific number. I don't think anyone obviously expects you to do that, but we're talking I think about --.

Question: Howard Lis - GMB - Analyst : Thank you and congratulations on a great quarter. Quick question on your cash and another item on your balance sheet. Other assets jumped by a substantial amount in the quarter -- maybe you can just comment on that. And do you have any plans to restart your share buyback? Thanks.