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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 19, 2006
Progress Software Corporation
(Exact name of registrant as specified in its charter)
Commission file number: 0-19417
| Massachusetts (State or other jurisdiction of incorporation or organization) |
04-2746201 (I.R.S. employer 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))
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Section 2 — Financial Information
Item 2.02 Results of Operations and Financial Condition
On June 19, 2006, Progress Software Corporation issued a press release announcing that it is
undertaking a voluntary review of its stock option practices. The review, being conducted by the
Audit Committee of the Company’s board of directors working with the Company’s outside legal
counsel, covers all option grants since the beginning of the Company’s 1996 fiscal year. At this
time, the Company has not concluded that any of its previously issued financial statements should
no longer be relied upon. It is possible, however, that as a result of this review the Company
could conclude that a restatement of its historical financial statements is required. The likely
effects of any such restatement would be to increase the amount of non-cash charges associated with
past option grants and to affect the related tax impact. A copy of this press release is furnished
as Exhibit 99.1 to this report, and the information in this paragraph is qualified by reference to
the press release in its entirety.
On June 19, 2006, the Company also issued a separate press release announcing certain financial
information for its second fiscal quarter ended May 31, 2006. In this release, the Company stated
that because its option review is not yet complete and its impact on the stock-based compensation
charges and related tax matters in the Company’s results of operations has not yet been determined,
the Company was not in a position to include in the release the usual information concerning its
GAAP or non-GAAP earnings for the second quarter. A copy of this press release is furnished as
Exhibit 99.2 to this report, and the information in this paragraph is qualified by reference to the
press release in its entirety.
The information in this Item 2.02 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.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated June 19, 2006
99.2 Press Release dated June 19, 2006
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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 19, 2006 | Progress Software Corporation |
|||
| By: | /s/ Norman R. Robertson | |||
| Senior Vice President, Finance and Administration | ||||
| and Chief Financial Officer | ||||
Exhibit 99.1
Press Contacts: |
||
John Stewart Progress Software Corporation (781) 280-4101 jstewart@progress.com |
Joan Geoghegan Schwartz Communications, Inc. (781) 684-0770 progress@schwartz-pr.com |
PROGRESS SOFTWARE UNDERTAKING VOLUNTARY REVIEW
OF ITS STOCK OPTION PRACTICES
OF ITS STOCK OPTION PRACTICES
Bedford, MA, June 19, 2006 — Progress Software Corporation (Nasdaq: PRGS), a supplier of leading
technology to develop, deploy, integrate and manage business applications, today announced that it
has begun a voluntary review of its historical practices regarding its stock option program. The
review, being conducted by the Audit Committee of the Company’s board of directors working with the
Company’s outside legal counsel, covers all option grants since the beginning of the Company’s 1996
fiscal year.
The review was prompted by recent media and analysts’ reports regarding stock option grant
practices of numerous companies, and by investor inquiries. At this time Progress has not received
any formal or informal notice or inquiry from the SEC or any other governmental agency, nor is
there pending litigation regarding stock option matters.
The Company will complete the review and disclose the results as soon as possible. At this time,
the Company has not concluded that any of its previously issued financial statements should no
longer be relied upon. It is possible, however, that as a result of this review the Company could
conclude that a restatement of its historical financial statements is required. The likely effects
of any such restatement would be to increase the amount of non-cash charges associated with past
option grants and to affect the related tax impact.
The net effect of any such changes would likely be to reduce the amount of the Company’s previously
reported operating income determined in accordance with generally accepted accounting principles in
the United States (“GAAP”), but not to affect non-GAAP operating income, which is the corresponding
non-GAAP financial measure that the Company discloses in its customary financial releases and
communications with investors. The non-GAAP operating income reported by the Company generally
excludes stock-based compensation, amortization of acquired intangibles and certain
acquisition-related expenses.
If the Company reaches the conclusion that a restatement of its historical financial statements is
necessary, it will promptly disclose that conclusion in accordance with SEC rules. The need to
complete the Company’s stock option review and to evaluate the necessity of any restatement of its
prior financial statements could result in a delay in the Company’s SEC or other regulatory
filings, including the filing of its Quarterly Report on Form 10-Q due July 10, 2006. Any such
delays could also affect the Company’s ability to continue its listing on the Nasdaq National
Market.
The Company grants stock options on a regular, periodic basis, generally twice per year. These
regular, Company-wide grants are made on the same date and at the same price to all officers,
directors and employees receiving grants, and account for most of the Company’s option grant
activity. Stock option grants that occur outside the regular Company-wide option grant cycle are
generally related to specific events such as acquisitions, recruitment of new hires or promotions.
Historically, approximately 75% of all options granted by the Company to employees have been
awarded to persons other than the Company’s executive officers, and more than 50% of the Company’s
employees currently hold stock options.
About Progress Software Corporation
Progress Software Corporation (Nasdaq: PRGS) is a global industry leader providing application
infrastructure software for all aspects of the development, deployment, integration and management
of business applications. Headquartered in Bedford, Mass., Progress can be reached at
www.progress.com or +1-781-280-4000.
-2-
Exhibit 99.2
Press Contacts: |
||
John Stewart Progress Software Corporation (781) 280-4101 jstewart@progress.com |
Joan Geoghegan Schwartz Communications, Inc. (781) 684-0770 progress@schwartz-pr.com |
PROGRESS SOFTWARE REPORTS
SECOND QUARTER FINANCIAL INFORMATION
SECOND QUARTER FINANCIAL INFORMATION
Revenue Up 9% Year-Over-Year
BEDFORD, Mass., June 19, 2006—Progress Software Corporation (Nasdaq: PRGS), a supplier of leading
technology to develop, deploy, integrate and manage business applications, today announced
financial information for its second quarter ended May 31, 2006. Revenue for the quarter was $109.6
million, up 9 percent (11 percent at constant currency) from $100.2 million in the second quarter
of fiscal 2005. Software license revenue increased 11 percent (13 percent at constant currency) to
$41.4 million from $37.2 million in the same quarter last year.
“Our DataDirect, and Sonic and Real Time product lines delivered solid revenue increases in the
second quarter. Our OpenEdge product line contributed positive software license revenue growth as
well as positive total revenue growth,” stated Joseph Alsop, co-founder and chief executive officer
of Progress Software. “Although we did not achieve double-digit revenue growth on a reported basis
during the second quarter, we achieved an 11% revenue increase in real, constant currency terms.”
The company’s cash and short-term investments at the end of the quarter totaled $227 million.
During the second quarter, the company purchased approximately 351,000 shares of its stock at a
cost of $9.3 million. The company’s existing repurchase authorization, under which 9.5 million
shares remain available for repurchase, expires on September 30, 2006.
As announced in the company’s separate press release today, the company’s Audit Committee is
conducting a review of the company’s option grant activity going back to fiscal 1996. Because this
option review is not yet complete and its impact on the stock-based compensation charges and
related tax matters in the company’s results of operations has not yet been determined, the company
stated that it is not in a position at this time to provide its GAAP or non-GAAP earnings for the
second quarter. For that
reason, this release does not include the usual earnings-related information, and the company will
not provide operating expense, operating income, net income or earnings per share information or
guidance in its regularly scheduled conference call on Tuesday, June 20, 2006.
Highlights
Progress Software announced a significant breakthrough in remote store automation with the
deployment of item-level RFID (Radio Frequency Identification) in an SOA (service oriented
architecture) suite of applications. Progress customer, and the Netherlands’ largest book retailer,
Boekhandels Groep Nederland (BGN), is launching two new, fully-automated ‘SmartStores’ that combine
item-level RFID tagging and SOA to deliver a tightly integrated ‘warehouse-to-consumer’ supply
chain.
http://www.progress.com/selexyz
http://www.progress.com/selexyz
Sonic Software introduced Sonic ESB 7.0. This release includes a new Eclipse-based workbench that
dramatically accelerates the modeling, configuration, testing and deployment of projects across
large-scale, distributed SOA environments. In addition, Sonic ESB 7.0 introduces an
enterprise-grade implementation of the advanced Web services standards necessary for
mission-critical SOA deployments. http://www.progress.com/sonic7
Progress Software announced the availability of Progress(R) Apama(R) Dashboard Studio™, a
richly-featured Business Activity Monitoring (BAM) dashboard design and execution environment for
the Progress Apama Event Stream Processing™ platform.
http://www.progress.com/progress_apama_dashboard
Progress Software announced that Kaman Industrial Technologies has selected the Progress(R)
EasyAsk(R) B2B eCommerce intelligent search, navigation and online merchandising technology for use
within its commerce website (www.kamandirect.com). One of North America’s largest distributors of
bearings, power transmission, electrical and motion control products, Kaman will now offer enhanced
search capabilities that provide a more intuitive, precise navigation
of their online catalog.
http://www.progress.com/kaman
http://www.progress.com/kaman
Significant New Customer and Partner Wins, New Technology Adoptions and Major Deployments
Significant new partners and customers adopting technology from Progress Software, or deploying
solutions using Progress Software technology, include: American Financial Group, Angoss Software,
Bare Escentuals, Baton Rouge Area Foundation, Carrot Communications ASA, Charles River Development
Center, Conglobal Industries, Department of the Army, Exelon Corporation, First Health, Fox
Broadcasting, GHIS Comercio de Veiculos, GXS, Lan Airlines, Lincoln Financial, Matria Healthcare,
Photoworks, Phytel, Puerto Rico Telephone, Savista Corporation, Southwest Florida Water Management,
Spokane School Districts, Springfield Public Schools, Tedesco, United Wisconsin Insurance,
USinternetwork, Verimatrix, Wayport and Zions Bancorp.
Significant existing partners and customers adopting new technology from Progress Software, or
making substantial additional deployments of Progress Software technology, include: Alcoa Global
Fasteners, American Airlines, AT&T, ATOS Origin, Bank of New York, Bayer Healthcare, Casa de Moneda
de Mexico, Cendant, Conseco, Cooperativa Mista Agraria, D&H Distribution, Dietrich Industries, Duke
University Medical Center, Embarq Communications, Fidelity Investments, Financiera Compartamos,
Fujitsu Transaction Solutions, GE Healthcare, Kronos, Marks and Spencer, MD Management,
Microstrategy, New Jersey Manufacturers, QVC, SeeBeyond, Sempra, Severn Trent and Water, Sonus,
State of Idaho, State of South Carolina, TRW Automotive, University of Arizona and Wear Me Apparel
Corporation.
Business Outlook
The company is providing the following revenue guidance:
| • | Revenue is expected to be in the range of $110 million to $112 million for the third quarter ended August 31, 2006. | ||
| • | Revenue is expected to be in the range of $442 million to $448 million for the fiscal year ended November 30, 2006. |
About Progress Software Corporation
Progress Software Corporation (Nasdaq: PRGS) is a global industry leader providing application
infrastructure software for all aspects of the development, deployment, integration and management
of business applications. Headquartered in Bedford, Mass., Progress can be reached at
www.progress.com or +1-781-280-4000.
Conference Call
A conference call to discuss the company’s second quarter financial information will be Webcast
live Tuesday, 20 June, 2006 at 9:00 a.m. Eastern Standard Time via CCBN 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.
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 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 customer service and technical
support, pricing pressures and the competitive environment in the software industry, and the
company’s ability to penetrate international markets and manage its international operations. 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, OpenEdge, Sonic ESB, DataDirect, Apama, Apama Dashboard Studio, Progress
Apama Event Stream Processing and Progress OpenEdge 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 or service marks contained herein are the property of
their respective owners.
Apama Event Stream Processing and Progress OpenEdge 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 or service marks contained herein are the property of
their respective owners.