BEDFORD, Mass.--(BUSINESS WIRE)--Jun. 18, 2009-- Progress Software Corporation (NASDAQ: PRGS), a provider of leading application infrastructure software to develop, deploy, integrate and manage business applications, today announced results for its second quarter ended May 31, 2009. On a generally accepted accounting principles (GAAP) basis, revenue for the quarter was $117 million, down 9 percent (up 1 percent at constant currency) from $128 million in the second quarter of fiscal 2008. On a non-GAAP basis, revenue totaled $118 million, down 8 percent (up 2 percent at constant currency) from the year ago period. The non-GAAP adjustment to revenue was to add back the purchase accounting adjustment for the reduction in deferred maintenance revenue related to the acquisition of IONA Technologies. Software license revenue decreased 14 percent (down 7 percent at constant currency) to $38.5 million from $45.0 million in the same quarter last year.
On a GAAP basis, operating income decreased 44 percent to $11.5 million from $20.6 million in the second quarter of fiscal 2008. Net income decreased 52 percent to $6.9 million from $14.5 million in the same quarter last year. Diluted earnings per share decreased 48 percent to 17 cents from 33 cents in the second quarter of fiscal 2008.
On a non-GAAP basis, operating income decreased 17 percent to $24.3 million from $29.1 million in the same quarter last year. Non-GAAP net income decreased 21 percent to $16.1 million from $20.4 million in the same quarter last year and non-GAAP diluted earnings per share decreased 17 percent to 39 cents per share from 47 cents in the second quarter of fiscal 2008.
Non-GAAP amounts exclude the amortization of acquired intangibles, stock-based compensation, restructuring and acquisition-related costs, purchase accounting adjustments for deferred revenue and professional services fees associated with the investigation and shareholder derivative lawsuits related to the company's historical stock option grant practices.
The non-GAAP results noted above and the non-GAAP financial outlook for 2009 discussed below represent non-GAAP financial measures. A reconciliation of these measures to the appropriate GAAP measures for the three months ended May 31, 2009 and May 31, 2008, and the 2009 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 second quarter totaled $149 million. Progress Software repurchased approximately 93,000 shares at a cost of $2.1 million in the second quarter of fiscal 2009. The existing repurchase authorization, under which approximately 9.6 million shares remain available for repurchase, expires on September 30, 2009.
Rick Reidy, president and chief executive officer of Progress Software, stated: “Our results reflect the difficult economic environment and unfavorable year-over-year currency rates present in Q2, however we met our revenue and earnings guidance. Moreover, continued cost containment measures undertaken during the quarter allowed us to achieve very solid profitability. We are well positioned competitively in this difficult economic environment with products that help our customers gain agility, reduce costs and improve operational responsiveness.”
On June 1, 2009, Progress Software received written notice from the Staff of the Division of Enforcement (the “Staff”) of the United States Securities and Exchange Commission (the “SEC”) that the SEC’s investigation of the company’s historical stock option granting practices has been completed and that the Staff does not intend to recommend any enforcement action against Progress Software.
The historical stock option granting practices at Progress Software were also the subject of three shareholder derivative lawsuits that were settled in September 2008. With the termination of the SEC’s investigation and settlement of these lawsuits, all outstanding matters relating to Progress Software’s historical stock option granting practices have now been resolved.
Progress Software is providing the following guidance for the fiscal year ending November 30, 2009:
Progress Software is providing the following guidance for the third fiscal quarterending August 31, 2009:
The outlook for the non-GAAP amounts excludes the amortization of acquired intangibles, stock-based compensation, purchase accounting adjustments for deferred revenue, restructuring and acquisition-related expenses, and professional services fees associated with the investigation related to the company's historical stock option grant practices.
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 conference call to discuss its fiscal second quarter 2009 results and business outlook will be Webcast live today at 9:00 a.m. Eastern Daylight Time on the company's Web site, located at www.progress.com/investors. The call will also be Webcast live via Yahoo (www.yahoo.com), Motley Fool (www.fool.com), Streetevents (www.streetevents.com), TD Waterhouse (www.tdwaterhouse.com) and Fidelity.com (www.fidelity.com). An archived version of the conference call will be available for replay on the Progress website (www.progress.com), together with the slide presentation for the call, under the investor relations page.
Progress Software Corporation
Progress Software Corporation (NASDAQ: PRGS) provides application infrastructure software for the development, deployment, integration and management of business applications. Our goal is to maximize the benefits of information technology while minimizing its 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 the Progress Software’s business outlook, 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 of enhancements to our 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 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; 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.
Actional, Apama, DataDirect, DataDirect Shadow, DataXtend, FUSE, OpenEdge, Progress, Sonic, and Sonic ESB 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