CORRECTING and REPLACING Progress Software Announces Strategic Plan to Increase Growth, Profitability and Shareholder Value
Plans Include Focus on
First paragraph after "Conference Call" has been replaced.
The corrected release reads:
PROGRESS SOFTWARE ANNOUNCES STRATEGIC PLAN TO INCREASE GROWTH, PROFITABILITY AND SHAREHOLDER VALUE
Plans Include Focus on
As part of the plan, Progress will divest multiple product lines that are not core to the new vision and launch immediate operational restructuring initiatives to significantly reduce annual costs. In addition, Progress' Board of Directors has authorized a substantial new share repurchase program.
The new strategic plan is the result of a five-month comprehensive
evaluation of the Company's product portfolio, business model, capital
allocation strategy, customer base and future opportunities. The
evaluation was led by Progress' President and Chief Executive Officer,
In commenting on the new plan, Bhatt said: "Progress pioneered the creation of application development and deployment infrastructure tools, technology and software. Our new strategic plan is firmly rooted in this foundation and is designed to significantly improve Progress' growth and performance. With our refined focus on providing advanced, leading-edge application development products and services to customers, we are confident that we will enhance value for all shareholders."
Bhatt continued: "Over the past five months, members of my executive management team and I met with customers, partners and shareholders, collaborated with employees and worked with the Board of Directors and our independent advisors to determine the best plan for growth and profitability. Valuable analysis, market feedback and lessons learned from previous product strategies helped inform our view and we fully intend to evolve Progress into a leaner company that will help to lead the computing evolution from on-premise to the Cloud. The Board and I are confident that Progress has the right DNA, scale and experience to make this transformation successful for the benefit of all stakeholders," added Bhatt.
Focused on Core Capabilities, Growth, Increasing Profitability and Cloud Trends
Under its new plan, Progress will unify the capabilities of OpenEdge,
According to a report by a leading independent IT research and advisory company, by 2015 most enterprises will have part of their business software running in the Cloud, and Cloud-based solutions will be growing at a faster rate than on-premise solutions. The same report also noted that less than 15% of Fortune 500 organizations are effectively collecting and analyzing Big Data in real time. Progress' focus on a singular, unified product offering will enable partners and customers to deploy, access and analyze applications on any platform, any device and any Cloud with the industry's fastest time-to-value.
In conjunction with this strategic vision, Progress intends to immediately embark on several initiatives to further strengthen the Company and enhance shareholder value. These initiatives include:
1. Divest Non-core Product Lines. Progress
will divest ten non-core product lines: Actional, Artix, DataXtend,
2. Cost Reductions. Progress expects to
reduce annual run-rate costs by approximately
3. Share Repurchase. The Board of Directors
has authorized a $350+ million share repurchase program, which will be
implemented over FY 2012 and FY 2013. The Company expects to complete
4. Invest in Core Products. The Company's
operational initiatives include (1) Investing in sales, marketing, and
strategic product development for OpenEdge and the
Beginning with its fiscal second quarter, the Company intends to
separately report on a non-GAAP basis its core and non-core operations.
FY 2011 revenue for core products was
For its core products, the Company expects to achieve a revenue growth rate of 5% in FY 2013 and 7%+ in FY 2014 and beyond and approximately 35% operating margins by FY 2013. Additionally, Progress' participation in the high-growth aPaaS market creates upside potential in FY 2014 and beyond.
Bhatt and other senior members of the management team will host an
investor conference call to review the new strategic plan at
Prior to the conference call,
Actional, Apama, Artix, Corticon,
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "target," "anticipate" and "continue," the negative of these words, other terms of similar meaning or the use of future dates. Forward-looking statements in this press release include, but are not limited to, statements regarding Progress's strategic plan and the expected timing for completion; the components of that plan including operational restructuring, product divestitures and return of capital to shareholders; acquisitions; future revenue growth, operating margin and cost savings; product development, strategic partnering and marketing initiatives; the growth rates of certain markets; and other statements regarding the future operation, direction and success of Progress's business. There are a number of factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation: (1) Progress's ability to realize the expected benefits and cost savings from its strategic plan; (2) market acceptance of Progress's strategic plan and product development initiatives; (3) disruption caused by implementation of the strategic plan and related restructuring and divestitures on relationships with employees, customers, vendors and other business partners; (4) pricing pressures and the competitive environment in the software industry and Platform-as-a-Service market; (5) Progress's ability to complete the proposed product divestitures in a timely manner, at favorable prices or at all; (6) Progress's ability to make technology acquisitions and to realize the expected benefits and anticipated synergies from such acquisitions; (7) the continuing weakness in the U.S. and international economies, which could result in fewer sales of Progress's products and/or delays in the implementation of Progress's strategic plan and may otherwise harm Progress's business;
(8) business and consumer use of the Internet and the continuing
adoption of Cloud technologies; (9) the receipt and shipment of new
orders; (10) Progress's ability to expand its relationships with channel
partners and to manage the interaction of channel partners with its
direct sales force; (11) the timely release of enhancements to
Progress's products and customer acceptance of new products; (12) the
positioning of Progress's products in its existing and new markets; (13)
variations in the demand for professional services and technical
support; (14) Progress's ability to penetrate international markets and
manage its international operations; and (15) changes in exchange rates.
For further information regarding risks and uncertainties associated
with Progress's business, please refer to Progress's filings with the
Important Shareholder Information
Progress will hold its 2012 Annual Meeting of Shareholders on May 31,
2012. Progress has filed with the
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT SOLICITATION
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THESE DOCUMENTS CONTAIN OR WILL CONTAIN IMPORTANT
The proxy statement and other relevant solicitation materials (when they
become available), and any and all documents filed by Progress with the
Progress and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders of
Progress in connection with the Annual Meeting. Information regarding
Progress's directors and executive officers is contained in Progress's
annual report on Form 10-K filed with the
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