UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 2010
Progress Software Corporation
(Exact name of registrant as specified in its charter)
Commission file number: 0-19417
| Massachusetts | 04-2746201 | |
| (State or other jurisdiction of | (I.R.S. employer | |
| incorporation or organization) | identification no.) |
14 Oak Park
Bedford, Massachusetts 01730
(Address of principal executive offices, including zip code)
Bedford, Massachusetts 01730
(Address of principal executive offices, including zip code)
(781) 280-4000
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
As described in more detail under Item 2.05 below, on June 10, 2010, Progress Software Corporation
(the “Company”) issued a press release announcing a further series of strategic initiatives to
better position the Company for long-term growth, improved profitability, greater competitiveness
and improved efficiency. In this press release, the Company also stated that it expects to achieve
or exceed its earnings per share guidance and be slightly below its revenue guidance for its second
fiscal quarter ended May 31, 2010. A copy of this press release is furnished as Exhibit 99.1 to
this report. This information shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing
of the Company, whether made before or after the date of this report, regardless of any general
incorporation language in the filing.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On June 10, 2010, the Company announced a further series of strategic initiatives to better
position the Company for long-term growth, improved profitability, greater competitiveness and
improved efficiency. To execute these initiatives, the Company announced that it is restructuring
its product organization as well as other functions to better optimize operations and to improve
productivity and efficiency. As a result, the Company expects to reduce its global workforce by
approximately 140 to 160 positions, which is approximately 7 to 9 percent of its global workforce.
The Company expects to complete most of these workforce reductions during its third fiscal quarter
ending August 31, 2010, depending upon local legal requirements. These workforce reductions will
occur in substantially all functional units and across all geographies in which the Company
operates. The Company also expects to consolidate offices in various locations.
As a result of these workforce reductions and office consolidations, the Company currently expects
to incur in the aggregate a pre-tax charge in the range of approximately $11 million to $16
million. The estimated aggregate charge consists of approximately $8 million to $12 million
relating to the Company’s global workforce reduction, consisting primarily of severance and
post-employment benefits, and approximately $3 million to $4 million relating to its office
consolidations. The Company currently expects to record this charge primarily in its 2010 third
fiscal quarter. Substantially all of this charge will result in cash expenditures.
The Company also announced that these strategic initiatives will include the global consolidation
and redeployment of a portion of the Company’s product development and administrative personnel,
assets and processes to India and/or potentially other global locations that offer greater efficiencies to
the business. In connection with these initiatives, the Company expects to incur future
pre-tax restructuring charges of between approximately $9 million to $13 million during the fourth
quarter of 2010 and the full 2011 fiscal year, primarily comprising costs for severance and
consolidation of facilities. Additionally, the Company expects to incur additional non-recurring,
pre-tax transition costs of approximately $8 million to $13 million over the next eighteen month
period commencing with the Company’s 2010 third fiscal quarter. These investments are necessary to
ramp up the new, more efficient capabilities ahead of switching over from the existing cost
structure. The Company will break out these restructuring charges and transition expenses in its
financial results as they are incurred during the phase-in period. Substantially all of these
charges will result in cash expenditures.
Except for the historical information and discussions contained herein, statements contained in
this report may constitute “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements, which include statements regarding the
Company’s business outlook for its second fiscal quarter, strategic plans and the actions and
estimated charges and anticipated timing described above, 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 the
Company’s products; the growth rates of certain market segments; the positioning of the Company’s
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 the
Company’s products and may otherwise harm the Company’s 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
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Company’s ability to penetrate international markets and manage its international operations;
changes in exchange rates; the Company’s ability to realize the expected benefits from the actions
described in this report; and the potential disruption to the Company’s business from the actions
described in this report. The Company undertakes no obligation to update information contained in
this report. For further information regarding risks and uncertainties associated with the
Company’s business, please refer to the Company’s other filings with the Securities and Exchange
Commission.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |
99.1*
|
Press release issued by Progress Software Corporation, dated June 10, 2010 |
| * | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 10, 2010 | Progress Software Corporation |
|||
| By: | /s/ Norman R. Robertson | |||
| Norman R. Robertson | ||||
| Senior Vice President, Finance
and Administration and Chief Financial Officer |
||||
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Exhibit 99.1
P R
E S S A N N O U N C E M E N T
Press Contacts: |
||
John Stewart
|
Claire Rowberry | |
Progress Software
|
LEWIS PR | |
+1 781-280-4101
|
+1 617-226-8841 | |
Jstewart@progress.com
|
progresssoftware@lewispr.com |
Progress Software Announces Next Phase of Growth Strategy
BEDFORD, Mass., June 10, 2010 — Progress Software Corporation (NASDAQ: PRGS), a leading
independent enterprise software provider that enables companies to be operationally responsive,
today unveiled a further series of strategic initiatives to better position the company for
long-term growth, improved profitability, greater competitiveness and improved efficiency across
its global business.
These initiatives include:
| • | The refinement of the company’s product portfolio towards core and high-growth opportunities, delivering industry-leading solutions that enable companies to be more operationally responsive. | ||
| • | An increased investment and expansion, over the next 18 months, of development and administration operations in India, where Progress has run a successful development organization for several years. | ||
| • | The continued consolidation of offices around the world. |
As the first step in accomplishing these strategic initiatives, during its third fiscal quarter
ending August 31, 2010, Progress Software expects to reduce its global headcount by 7 to 9 percent
of its global workforce. The Company currently expects to incur a pre-tax charge in the range of
approximately $11 million to $16 million during its 2010 third fiscal quarter as a result of these
headcount reductions and office consolidations.
These strategic initiatives also involve the global consolidation and redeployment of a portion of
the Company’s product development and administrative personnel, assets and processes to India
and/or potentially other global locations that offer greater efficiencies to the business. Through
these initiatives, Progress Software expects to incur future pre-tax restructuring charges of
approximately $9 million to $13 million during the fourth quarter of 2010 and the full 2011 fiscal
year, primarily comprising costs for severance and consolidation of facilities. Additionally, the
Company expects to incur additional non-recurring, pre-tax transition costs of approximately $8
million to $13 million over the next eighteen month period commencing with fiscal Q3. These
investments are necessary to ramp up the new, more efficient capabilities ahead of switching over
from the existing cost structure. Progress Software will break out these restructuring charges and
transition expenses in its financial results as they are incurred during the phase-in period.
Richard D. Reidy, president and chief executive officer, Progress Software, said: “When I was
appointed CEO, I committed to a transformational vision for Progress Software that focuses on
growth and improved operational efficiency. Achieving this vision has required substantial change
that we knew would be implemented in stages. Collectively, these moves have made us a stronger,
more focused company, better able to achieve the aggressive goals we’ve set for Progress.”
The Company expects to meet or exceed its fiscal Q2 earnings per share guidance and be slightly
below revenue guidance as provided in its first quarter earnings press release issued on March 23,
2010. Further details on the Company’s long-term growth initiatives and business outlook will be
provided during the Company’s fiscal Q2 earnings conference call scheduled for June 23, 2010.
Progress Software Corporation
Progress Software Corporation (NASDAQ: PRGS) is an independent enterprise software company that
enables businesses 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 enterprise 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 the
Company’s business outlook for its second fiscal quarter, strategic plans and the actions and
estimated charges and anticipated timing described above, 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 the
Company’s products; the growth rates of certain market segments; the positioning of the Company’s
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 the
Company’s products and may otherwise harm the Company’s 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; changes in
exchange rates; the Company’s ability to realize the expected benefits from the actions described
above; and the potential disruption to the Company’s business from the actions described in this
release. 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.
Progress, Progress RPM, Responsive Process Management suite, Progress Control Tower, and
OpenEdge are trademarks or registered trademarks of Progress Software Corporation and/or its
subsidiaries or affiliates in the U.S. and other countries. Any other trademarks contained herein
are the property of their respective owners.
END