Progress Software Corporation (NASDAQ: PRGS), a leading independent enterprise software provider that enables companies to be operationally responsive, today announced results for its fourth quarter ending November 30, 2009. On a generally accepted accounting principles (GAAP) basis, revenue for the quarter was $136.8 million, down 2 percent (5 percent at constant currency) from $139.4 million in the fourth quarter of fiscal 2008. On a non-GAAP basis, revenue totaled $136.9 million, representing a 4 percent decrease (7 percent at constant currency) over the year ago period. Software license revenue decreased 7 percent (10 percent at constant currency) to $52.0 million from $56.1 million in the same quarter last year.
On a GAAP basis, operating income increased 202 percent to $25.8 million from $8.5 million in the fourth quarter of fiscal 2008. Net income increased 158 percent to $16.7 million from $6.5 million in the same quarter last year. Diluted earnings per share increased 150 percent to 40 cents from 16 cents in the fourth quarter of fiscal 2008.
On a non-GAAP basis, operating income increased 10 percent to $37.4 million from $34.0 million in the same quarter last year. Non-GAAP net income increased 7 percent to $25.6 million from $24.0 million in the same quarter last year and non-GAAP diluted earnings per share increased 5 percent to 61 cents per share from 58 cents in the fourth quarter of fiscal 2008.
For the twelve months ended November 30, 2009, GAAP revenue decreased 4 percent (up 1 percent at constant currency) to $494.1 million from $515.6 million in fiscal 2008. On a non-GAAP basis, revenue decreased 4 percent (up 1 percent at constant currency) to $496.8 million from $518.3 million in fiscal 2008.
On a GAAP basis, operating income decreased 21 percent to $51.1 million from $64.4 million in fiscal 2008. Net income decreased 29 percent to $32.8 million from $46.3 million in fiscal 2008 and diluted earnings per share decreased 26 percent to 80 cents from $1.08 in fiscal 2008.
On a non-GAAP basis, operating income decreased 6 percent to $109.4 million from $115.9 million last year. Non-GAAP net income decreased 10 percent to $73.8 million from $81.9 million last year and non-GAAP diluted earnings per share decreased 6 percent to $1.80 from $1.92 in 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 2010 discussed below represent non-GAAP financial measures. A reconciliation of these measures to the appropriate GAAP measures for the three and twelve months ended November 30, 2009 and 2008 and the 2010 outlook, as well as further information regarding these measures, is included in the condensed financial information provided with this release.
The company's cash and short-term investments at the end of the year totaled $224.1 million.
In September 2009, Progress Software’s Board of Directors extended the company’s stock repurchase program by authorizing Progress Software to repurchase an aggregate of 1 million shares during the period from October 1, 2009 until September 30, 2010. The company repurchased approximately 3,000 shares of its common stock at a cost of $0.1 million in the fourth quarter of fiscal 2009 under this new repurchase authorization.
Richard D. Reidy, president and chief executive officer, Progress Software, said: “We exceeded our guidance for both revenue and earnings in our fiscal fourth quarter as a result of excellent customer wins along with well-managed expense management, despite the difficult economic environment. The Progress Apama and Actional product lines achieved double- and triple-digit growth respectively in the fiscal fourth quarter. Furthermore, we expect our newer product lines to continue on their significant growth path in 2010 achieving a greater than 20 percent increase in revenue; we also anticipate strong earnings overall for the year.”
The company is providing the following guidance for the fiscal year ending November 30, 2010:
The company is providing the following guidance for the first fiscal quarter ending February 28, 2010:
The outlook for the non-GAAP amounts excludes amortization of acquired intangibles, stock-based compensation, restructuring charges and acquisition-related expenses. As previously announced, the company initiated a restructuring plan in the first quarter of fiscal 2010 that will result in a pre-tax charge of between $20 million and $30 million related to reductions in headcount and consolidation of facility locations.
Legal Notice Regarding Non-GAAP Financial Information
The company 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. The company 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 of the company 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 fourth 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) 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 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 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; and changes in foreign currency 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, OpenEdge, Progress, and Sonic 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.