Progress Software Reports 2010 First Quarter Results
BEDFORD, Mass., Mar 23, 2010 (BUSINESS WIRE) -- Progress Software Corporation (NASDAQ: PRGS), a leading software provider that enables enterprises to be operationally responsive, announced today results for its first quarter ended February 28, 2010. On a generally accepted accounting principles (GAAP) basis, revenue for the quarter was $127.5 million, up 6 percent from $120.9 million in the first quarter of fiscal 2009. On a non-GAAP basis, revenue totaled $128.0 million, up 5 percent from the year ago period. Software license revenue increased 3 percent to $47.1 million from $45.9 million in the same quarter last year.
The GAAP operating results for the first quarter of fiscal 2010 reflect a restructuring charge of $25.8 million taken in connection with the previously announced restructuring of Progress Software's operations. This restructuring was principally completed during the first quarter. It was undertaken to enhance and re-focus the company's product strategy, to improve the way the company takes its products to market by becoming more customer and solutions driven, and to increase Progress Software's market awareness. To accomplish these goals, and with a view toward better optimizing operations and improving productivity and efficiency, the company reduced its global workforce by approximately 13 percent primarily within its sales, development and marketing organizations. This workforce reduction was conducted across all geographies and also resulted in a consolidation of offices in certain locations.
On a GAAP basis, the company incurred an operating loss of $4.4 million as compared to an operating profit of $4.7 million in the first quarter of fiscal 2009. Net income represented a loss of $1.0 million as compared to a profit of $3.7 million in the same quarter last year. As noted above, the loss was the result of the restructuring charge. Diluted earnings per share represented a loss of 2 cents as compared to a profit of 9 cents in the first quarter of fiscal 2009.
On a non-GAAP basis, operating income increased 44 percent to $32.8 million from $22.8 million in the same quarter last year. Non-GAAP net income increased 44 percent to $22.7 million from $15.8 million in the same quarter last year and non-GAAP diluted earnings per share increased 36 percent to 53 cents from 39 cents in the first quarter of fiscal 2009.
Non-GAAP amounts primarily exclude the amortization of acquired intangibles, stock-based compensation, restructuring and acquisition-related costs, purchase accounting adjustments for deferred revenue and certain insurance reimbursements.
The non-GAAP results noted above and the non-GAAP financial outlook for 2010 discussed below represent non-GAAP financial measures. A reconciliation of these measures to the appropriate GAAP measures for the three months ended February 28, 2010 and February 28, 2009, and the 2010 outlook, as well as further information regarding these measures, is included in the condensed financial information provided with this release.
Progress Software's cash and short-term investments at the end of the first quarter totaled $211 million. Progress Software repurchased approximately 351,000 shares at a cost of $10.0 million in the first quarter of fiscal 2010. The existing re-purchase authorization, under which approximately 646,000 shares remain available for repurchase, expires on September 30, 2010.
Richard D. Reidy, president and chief executive officer of Progress Software, said: "We grew top line non-GAAP revenue by five percent and non-GAAP earnings per share by 36 percent during the quarter while increasing revenue in our Enterprise Business Solutions portfolio by more than 25 percent year over year. In January, we acquired Savvion, a best-in-class Business Process Management (BPM) solution that complements Progress products to enable enterprises to achieve Operational Responsiveness. More recently, the company announced the Progress® Responsive Process Management (RPM) suite, a next generation business solution that better positions Progress to market and sell solutions to a broader market segment, comprising both its traditional IT target audience and business user segments."
Additional highlights can be found at: http://web.progress.com/inthenews/pressreleases.html.
Progress Software is providing the following guidance for the fiscal year ending November 30, 2010:
Progress Software is providing the following guidance for the second fiscal quarter ending May 31, 2010:
The outlook for the non-GAAP amounts excludes the amortization of acquired intangibles, stock-based compensation, restructuring and acquisition-related costs, purchase accounting adjustments for deferred revenue and certain insurance reimbursements.
Legal Notice Regarding Non-GAAP Financial Information
Progress Software provides non-GAAP revenue, operating income, net income and earnings per share as additional information for investors. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). Such measures are intended to supplement GAAP and may be different from non-GAAP measures used by other companies. Progress Software believes that the non-GAAP results described in this release are useful for an understanding of its ongoing operations and provide additional detail and an alternative method of assessing its operating results. Management uses these non-GAAP results to compare the company's performance to that of prior periods for analysis of trends and for budget and planning purposes. A reconciliation of non-GAAP adjustments to the company's GAAP financial results is included in the tables below.
The Progress Software quarterly investor conference call to review its fiscal first quarter 2010 results and business outlook will be Webcast live at 9:00 a.m. (EDT) on Wednesday, 24 March, 2010 on the company's Web site, located at www.progress.com/investors.
As previously disclosed, beginning this quarter, in combination with this press release, Progress Software is providing in advance a copy of prepared remarks for its conference call. The press release and the prepared remarks are available on the Progress website (www.progress.com) on the investor relations page. The conference call will include only brief comments followed by questions and answers. The prepared remarks will not be read on the call.
The conference call will be webcast and accessible on the Progress Website at http://www.progress.com/investors. The conference call will also be webcast live via Yahoo (http://www.yahoo.com), Motley Fool (http://www.fool.com), Streetevents (http://www.streetevents.com), TD Waterhouse (http://www.tdwaterhouse.com) and Fidelity.com (http://www.fidelity.com). An archived version of the conference call and supporting materials will be available on the Progress Software Investor Relations Website after the live conference call.
Progress Software Corporation
Progress Software Corporation (NASDAQ: PRGS) is a global software company that enables enterprises to be operationally responsive to changing conditions and customer interactions as they occur - to capitalize on new opportunities, drive greater efficiencies and reduce risk. The company offers a comprehensive portfolio of best-in-class infrastructure software spanning event-driven visibility and real-time response, open integration, data access and integration, and application development and deployment - all supporting on-premises and SaaS/Cloud deployments. Progress maximizes the benefits of operational responsiveness while minimizing IT complexity and total cost of ownership. Progress can be reached at www.progress.com or +1-781-280-4000.
Safe Harbor Statement
Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which include statements regarding Progress Software's business outlook and competitive position, involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including but not limited to the following: the receipt and shipment of new orders; the timely release and market acceptance of new products and/or enhancements to our existing products; the growth rates of certain market segments; the positioning of our products in those market segments; variations in the demand for professional services and technical support; pricing pressures and the competitive environment in the software industry; the continuing weakness in the U.S. and international economies, which could result in fewer sales of our products and may otherwise harm our business; business and consumer use of the Internet; the company's ability to complete and integrate acquisitions; the company's ability to realize the expected benefits and anticipated synergies from acquired businesses; the company's ability to penetrate international markets and manage its international operations; the possibility that our efforts to contain our operating expenses may not have the effects we expect; and changes in exchange rates. The company undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with the company's business, please refer to the company's filings with the Securities and Exchange Commission.
OpenEdge, Progress, Progress RPM are trademarks or registered trademarks of Progress Software Corporation or one of its subsidiaries or affiliates in the U.S. and other countries. Any other trademarks contained herein are the property of their respective owners.
SOURCE: Progress Software Corporation
Progress Software Corporation
John Stewart, 781-280-4101
Claire Rowberry, 617-226-8841
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