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8-K - FORM 8-K - PROGRESS SOFTWARE CORP /MA | b82725e8vk.htm |
EX-99.2 - EX-99.2 - PROGRESS SOFTWARE CORP /MA | b82725exv99w2.htm |
Exhibit 99.1
PRESS ANNOUNCEMENT
John Stewart
|
Claire Rowberry | |
Progress Software Corporation
|
Lewis PR | |
(781) 280-4101
|
(617) 226-8841 | |
jstewart@progress.com
|
progress@lewispr.com |
Progress Software Reports 2010 Third Quarter Results
Enterprise Business Solutions Revenue Up 77%;
Non-GAAP Net Income Up 52%
Non-GAAP Net Income Up 52%
BEDFORD, MA, Sept 21, 2010 (MARKETWIRE) Progress Software Corporation
(NASDAQ: PRGS), a leading software provider that enables enterprises to be operationally responsive
announced today results for its third fiscal quarter ended August 31, 2010. On a generally
accepted accounting principles (GAAP) basis, revenue for the quarter was $128.7 million, up 8
percent from $119.4 million in the third quarter of fiscal 2009. On a non-GAAP basis, revenue
totaled $128.8 million, also up 8 percent compared to the same period a year ago. Software license
revenue increased 14 percent to $44.7 million from $39.2 million in the same quarter last year.
On a GAAP basis:
| Operating income increased 81 percent to $16.5 million in the third quarter of fiscal 2010 as compared to $9.1 million in the same quarter last year; | ||
| Net income increased 67 percent to $9.2 million from $5.5 million in the same quarter last year; | ||
| Diluted earnings per share increased 62 percent to 21 cents in the third quarter of fiscal 2010 as compared to 13 cents in the same quarter a year ago. |
On a non-GAAP basis:
| Operating income increased 59 percent to $39.7 million in the third quarter of fiscal 2010 as compared to $24.9 million in the same quarter last year; | ||
| Non-GAAP net income increased 52 percent to $25.0 million from $16.5 million in the same quarter last year; | ||
| Non-GAAP diluted earnings per share increased 40 percent to 56 cents in the third quarter of fiscal 2010 as compared to 40 cents in the same quarter last year. |
The GAAP operating results for the third quarter of fiscal 2010 reflect a restructuring charge of
$11.5 million taken in connection with the previously announced restructuring of Progress
Softwares operations.
The non-GAAP amounts primarily exclude the amortization of acquired intangibles, stock-based
compensation, restructuring and acquisition-related costs and purchase accounting adjustments for
deferred revenue.
The non-GAAP results noted above and the non-GAAP financial outlook for 2010 and 2011 discussed
below represent non-GAAP financial measures. A reconciliation of these measures to the appropriate
GAAP measures for the three months ended August 31, 2010 and August 31,
2009, and the 2010 and 2011 outlook, as well as further information regarding these measures, is
included in the condensed financial information provided with this release.
Richard D. Reidy, president and chief executive officer of Progress Software, said: The companys
third quarter performance was strong. I am particularly pleased with the performance of our
products in the Enterprise Business Solutions (EBS) portfolio. Our recently released Progress®
Responsive Process Management suite helped drive several multi-product solution sales. We also
achieved strong results with our best-in-class technologies, comprising the Progress Savvion BPM,
Apama® CEP, Sonic® ESB, Actional® BTM, and FUSE open source
product lines. The companys solid top line growth, coupled with disciplined expense management,
were also key factors in generating an increase in our non-GAAP operating income by 59 percent
during the quarter.
Reidy added: This month, we held our annual Online Exchange conference, which attracted more than
2,500 attendees from over 66 countries across two days. This conference is targeted towards our
Progress OpenEdge® Application Partners, who are ISVs that use OpenEdge to build their
software applications, and enterprise customers. Of particular interest to this audience were our
recently announced Progress OpenEdge BPM initiative and our vision for simplifying the deployment
of applications in the cloud.
Progress Softwares cash and short-term investments at the end of the third quarter totaled $269
million. Progress Software repurchased approximately 598,000 shares at a cost of $17.8 million in
the third quarter of fiscal 2010.
Quarterly Highlights
| Air France-KLM Airlines chose the Actional SOA Management platform, part of the Progress Responsive Process Management (RPM) suite, to offer better visibility and help deliver 100 percent availability on its reservation systems. Subsequent to their merger with Air France in 2004, KLM recognized they had an ever-growing amount of complex IT systems needing to work together to ensure their transactions work as expected. They also needed to find a way of integrating the multiple disparate systems from both companies, and avoid a costly rip and replace strategy. | ||
| Progress Software reported that Royal Bank of Canada (RBC) successfully deployed the Apama FX Aggregation solution accelerator to support its Foreign Exchange dealing operations. The Apama FX Aggregation solution accelerator is completely customizable and has been modified for RBC to meet their specific requirements. RBCs new system has significantly increased the efficiency by which RBCs traders obtain the best FX prices for their clients. | ||
| Forrester Research, Inc. named Progress Software a leader in The Forrester WaveTM: Business Process Management Suites, Q3 2010 (August 2010) report with its Savvion BPM product. In this detailed review of business process management (BPM) suites, the Savvion BPM product was described as a leader with competitive products that offer industry-leading development environments and improved tools for business stakeholders. | ||
| Agora Corretora de Titulos e Valores Mobiliarios S.A. (CVTM), a division of Banco Bradesco S.A. (Bradesco) and one of the largest brokers in Brazils securities industry, launched a new suite of proprietary algorithms for equities and options powered by the Progress Apama Capital Markets platform. The new suite offers a wide variety of new alpha-seeking and execution strategies. It also enables Agora customers to access these new algorithms remotely through an intuitive web interface. |
| The financial services group, Banco Bilbao Vizcaya Argentaria (BBVA), went live on the Apama FX Aggregation Accelerator for its foreign exchange operations. BBVA FX traders now use the Apama platform along with its customized dashboards to view and trade across aggregated liquidity from a number of banks and FX ECNs. BBVA chose the Apama platform because of Progress Softwares extensive experience in the FX market, gained through numerous successful deployments of the FX Aggregation Accelerator with tier one and tier two banks. | ||
| Charles River Development, a front- and middle-office software solutions provider for investment firms, selected the Progress SonicMQ® messaging platform as the messaging backbone for their real-time event based architecture. The SonicMQ product is a component of Charles River Developments architecture, helping to deliver low latency and continuous availability within the Charles River Investment Management System (Charles River IMS) Version 9.1. Charles River selected the SonicMQ platform and the Sonic Continuous Availability Architecture for its track record in providing financial services firms with highly-available, reliable and secure messaging. | ||
| Prudential UK has deployed the Progress FUSE ESB® (enterprise service bus) in its annuities business unit as a first step in making their IT infrastructure more agile. This initial stage uses the FUSE ESB product to integrate complex back-end infrastructure enabling automated processing to support its Annuities Operation. Prudential also began adopting the Progress FUSE Message Broker® product for high performance, reliable messaging. | ||
| Three Progress Software employees were honored during the quarter. Dr. John Bates, Progress Softwares chief technology officer, was appointed to the newly established Technology Advisory Committee (TAC) for the US Commodity Futures Trading Commission (CFTC). Colleen Smith, vice president of SaaS, was selected by editors of Everything Channels CRN Magazine as one of the top 100 Women in the Channel for the second consecutive year. Smith was also rated a Rising Star in CRNs Women in the Channel feature in 2007, as well as being named Channel Chief multiple times. John Wilmes, the companys Chief Technology Architect, Communications Sector, was named a Distinguished Fellow by the TM Forum. The Distinguished Fellow Award recognizes individuals, who have made valuable contributions to the TM Forum and to the communications industry as a whole. |
Additional highlights can be found at: http://web.progress.com/inthenews/pressreleases.html.
Business Outlook
Progress Software is providing the following guidance for the fiscal year ending November 30, 2010:
| GAAP revenue is expected to be in the range of $523 million to $527 million. | ||
| On a non-GAAP basis, revenue is expected to be in the range of $524 million to $528 million. | ||
| GAAP diluted earnings per share are expected to be in the range of $1.01 to $1.09. | ||
| On a non-GAAP basis, diluted earnings per share are expected to be in the range of $2.32 to $2.36. |
Progress Software is providing the following guidance for the fourth fiscal quarter ending November
30, 2010:
| On a GAAP and non-GAAP basis, revenue is expected to be in the range of $139 million to $143 million. | ||
| GAAP diluted earnings per share are expected to be in the range of 38 cents to 46 cents. |
| On a non-GAAP basis, diluted earnings per share are expected to be in the range of 64 cents to 68 cents. |
Progress Software is also providing the following initial guidance for the fiscal year ending
November 30, 2011:
| On a GAAP and non-GAAP basis, revenue is expected to be in the range of $555 million to $565 million. | ||
| GAAP diluted earnings per share are expected to be in the range of $1.60 to $1.80. | ||
| On a non-GAAP basis, diluted earnings per share are expected to be in the range of $2.50 to $2.60. |
The outlook for non-GAAP revenue excludes purchase accounting adjustments for deferred revenue.
The outlook for non-GAAP earnings excludes the amortization of acquired intangibles, stock-based
compensation, restructuring, transition and acquisition-related costs, purchase accounting
adjustments for deferred revenue, certain insurance reimbursements and related tax effects.
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 companys
performance to that of prior periods for analysis of trends and for budget and planning purposes.
A reconciliation of non-GAAP adjustments to the companys GAAP financial results is included in the
tables below.
Conference Call
The Progress Software quarterly investor conference call to review its fiscal second quarter 2010
results and business outlook will be Webcast live at 9:00 a.m. (EDT) on Wednesday, September 22,
2010 on the companys Web site, located at http://investors.progress.com/.
As previously disclosed, 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 (http://investors.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://investors.progress.com/. 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 Software maximizes the benefits of operational responsiveness while minimizing IT
complexity and total cost of ownership. Progress Software 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
Companys business outlook for its fourth fiscal quarter, full 2010 fiscal year and full 2011
fiscal year and strategic plans, 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 Companys products;
the growth rates of certain market segments; the positioning of the Companys 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; continuing uncertainty in the
U.S. and international economies, which could result in fewer sales of the Companys products and
may otherwise harm the Companys business; the Companys ability to complete and integrate
acquisitions; the Companys ability to realize the expected benefits and anticipated synergies from
acquired businesses; the Companys ability to penetrate international markets and manage its
international operations; changes in exchange rates; the Companys ability to realize the expected
benefits from its previously-announced restructuring actions; and the potential disruption to the
Companys business from those restructuring actions . The Company undertakes no obligation to
update information contained in this release. For further information regarding risks and
uncertainties associated with the Companys business, please refer to the Companys filings with
the Securities and Exchange Commission.
Actional, Apama, FUSE ESB, FUSE, OpenEdge, Progress, Progress RPM, Responsive Process
Management, Savvion and SonicMQ, 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.
END
Progress Software Corporation
GAAP Condensed Consolidated Statements of Operations
GAAP Condensed Consolidated Statements of Operations
Three Months Ended | ||||||||||||
August 31, | August 31, | Percent | ||||||||||
(In thousands except per share data) | 2010 | 2009 | Change | |||||||||
Revenue: |
||||||||||||
Software licenses |
$ | 44,748 | $ | 39,173 | 14 | % | ||||||
Maintenance and services |
83,989 | 80,260 | 5 | % | ||||||||
Total revenue |
128,737 | 119,433 | 8 | % | ||||||||
Costs of revenue: |
||||||||||||
Cost of software licenses |
2,025 | 1,758 | 15 | % | ||||||||
Cost of maintenance and services |
17,845 | 15,957 | 12 | % | ||||||||
Amortization of purchased technology |
4,839 | 4,811 | 1 | % | ||||||||
Total costs of revenue |
24,709 | 22,526 | 10 | % | ||||||||
Gross profit |
104,028 | 96,907 | 7 | % | ||||||||
Operating expenses: |
||||||||||||
Sales and marketing |
39,362 | 45,511 | (14 | )% | ||||||||
Product development |
21,941 | 22,378 | (2 | )% | ||||||||
General and administrative |
11,937 | 17,717 | (33 | )% | ||||||||
Amortization of other acquired intangibles |
2,733 | 2,310 | 18 | % | ||||||||
Acquisition-related expenses |
53 | 110 | ||||||||||
Restructuring expense |
11,533 | (211 | ) | |||||||||
Total operating expenses |
87,559 | 87,815 | 0 | % | ||||||||
Income from operations |
16,469 | 9,092 | 81 | % | ||||||||
Other income (expense), net |
(1,720 | ) | (187 | ) | ||||||||
Income before provision for income taxes |
14,749 | 8,905 | 66 | % | ||||||||
Provision for income taxes |
5,505 | 3,384 | 63 | % | ||||||||
Net income |
$ | 9,244 | $ | 5,521 | 67 | % | ||||||
Earnings per share: |
||||||||||||
Basic |
$ | 0.21 | $ | 0.14 | 50 | % | ||||||
Diluted |
$ | 0.21 | $ | 0.13 | 62 | % | ||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
43,224 | 40,117 | 8 | % | ||||||||
Diluted |
44,424 | 41,261 | 8 | % | ||||||||
Nine Months Ended | ||||||||||||
August 31, | August 31, | Percent | ||||||||||
(In thousands except per share data) | 2010 | 2009 | Change | |||||||||
Revenue: |
||||||||||||
Software licenses |
$ | 136,093 | $ | 123,538 | 10 | % | ||||||
Maintenance and services |
247,847 | 233,802 | 6 | % | ||||||||
Total revenue |
383,940 | 357,340 | 7 | % | ||||||||
Costs of revenue: |
||||||||||||
Cost of software licenses |
5,633 | 5,602 | 1 | % | ||||||||
Cost of maintenance and services |
53,086 | 49,287 | 8 | % | ||||||||
Amortization of purchased technology |
15,222 | 14,609 | 4 | % | ||||||||
Total costs of revenue |
73,941 | 69,498 | 6 | % | ||||||||
Gross profit |
309,999 | 287,842 | 8 | % | ||||||||
Operating expenses: |
||||||||||||
Sales and marketing |
122,707 | 133,331 | (8 | )% | ||||||||
Product development |
68,481 | 70,320 | (3 | )% | ||||||||
General and administrative |
38,167 | 46,123 | (17 | )% | ||||||||
Amortization of other acquired intangibles |
7,833 | 7,149 | 10 | % | ||||||||
Acquisition-related expenses |
468 | 330 | 42 | % | ||||||||
Restructuring expense |
37,508 | 5,237 | ||||||||||
Total operating expenses |
275,164 | 262,490 | 5 | % | ||||||||
Income from operations |
34,835 | 25,352 | 37 | % | ||||||||
Other income, net |
4,955 | 582 | 751 | % | ||||||||
Income before provision for income taxes |
39,790 | 25,934 | 53 | % | ||||||||
Provision for income taxes |
12,495 | 9,855 | 27 | % | ||||||||
Net income |
$ | 27,295 | $ | 16,079 | 70 | % | ||||||
Earnings per share: |
||||||||||||
Basic |
$ | 0.65 | $ | 0.40 | 63 | % | ||||||
Diluted |
$ | 0.62 | $ | 0.39 | 59 | % | ||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
42,280 | 40,018 | 6 | % | ||||||||
Diluted |
43,782 | 40,826 | 7 | % | ||||||||
Progress Software Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended August 31, 2010 | Three Months Ended August 31, 2009 | |||||||||||||||||||||||||||
As | As | Percent | ||||||||||||||||||||||||||
(In thousands except per share data) | Reported | Adjustments | Non-GAAP | Reported | Adjustments | Non-GAAP | Change | |||||||||||||||||||||
Total revenue |
$ | 128,737 | $ | 79 | $ | 128,816 | $ | 119,433 | 286 | $ | 119,719 | 8 | % | |||||||||||||||
Purchase accounting adjustments for
deferred revenue (1) |
(79 | ) | 79 | (286 | ) | 286 | ||||||||||||||||||||||
Income from operations |
$ | 16,469 | $ | 23,226 | $ | 39,695 | $ | 9,092 | $ | 15,834 | $ | 24,926 | 59 | % | ||||||||||||||
Purchase accounting adjustments for
deferred revenue (1) |
(79 | ) | 79 | (286 | ) | 286 | ||||||||||||||||||||||
Amortization of acquired intangibles |
(7,572 | ) | 7,572 | (7,121 | ) | 7,121 | ||||||||||||||||||||||
Acquisition-related expenses |
(53 | ) | 53 | (110 | ) | 110 | ||||||||||||||||||||||
Restructuring expense |
(11,533 | ) | 11,533 | 211 | (211 | ) | ||||||||||||||||||||||
Stock option investigation (2) |
| | 321 | (321 | ) | |||||||||||||||||||||||
Stock-based compensation (3) |
(3,989 | ) | 3,989 | (8,849 | ) | 8,849 | ||||||||||||||||||||||
Operating margin percentage |
12.8 | % | 30.8 | % | 7.6 | % | 20.8 | % | 48 | % | ||||||||||||||||||
Other income (expense), net |
$ | (1,720 | ) | $ | | $ | (1,720 | ) | $ | (187 | ) | $ | | $ | (187 | ) | ||||||||||||
Provision for income taxes (5) |
$ | 5,505 | $ | 7,501 | $ | 13,006 | $ | 3,384 | $ | 4,903 | $ | 8,287 | 57 | % | ||||||||||||||
Net income |
$ | 9,244 | $ | 15,725 | $ | 24,969 | $ | 5,521 | $ | 10,931 | $ | 16,452 | 52 | % | ||||||||||||||
Earnings per share diluted |
$ | 0.21 | $ | 0.56 | $ | 0.13 | $ | 0.40 | 40 | % | ||||||||||||||||||
Weighted average shares outstanding diluted |
44,424 | 44,424 | 41,261 | 41,261 | 8 | % |
Nine Months Ended August 31, 2010 | Nine Months Ended August 31, 2009 | |||||||||||||||||||||||||||
As | As | Percent | ||||||||||||||||||||||||||
(In thousands except per share data) | Reported | Adjustments | Non-GAAP | Reported | Adjustments | Non-GAAP | Change | |||||||||||||||||||||
Total revenue |
$ | 383,940 | $ | 1,138 | $ | 385,078 | $ | 357,340 | 2,529 | $ | 359,869 | 7 | % | |||||||||||||||
Purchase accounting adjustments for
deferred revenue (1) |
(1,138 | ) | 1,138 | (2,529 | ) | 2,529 | ||||||||||||||||||||||
Income from operations |
$ | 34,835 | $ | 73,505 | $ | 108,340 | $ | 25,352 | $ | 46,648 | $ | 72,000 | 50 | % | ||||||||||||||
Purchase accounting adjustments for
deferred revenue (1) |
(1,138 | ) | 1,138 | (2,529 | ) | 2,529 | ||||||||||||||||||||||
Amortization of acquired intangibles |
(23,055 | ) | 23,055 | (21,758 | ) | 21,758 | ||||||||||||||||||||||
Acquisition-related expenses |
(468 | ) | 468 | (330 | ) | 330 | ||||||||||||||||||||||
Restructuring expense |
(37,508 | ) | 37,508 | (5,237 | ) | 5,237 | ||||||||||||||||||||||
Stock option investigation (2) |
1,330 | (1,330 | ) | 120 | (120 | ) | ||||||||||||||||||||||
Stock-based compensation (3) |
(12,666 | ) | 12,666 | (16,914 | ) | 16,914 | ||||||||||||||||||||||
Operating margin percentage |
9.1 | % | 28.1 | % | 7.1 | % | 20.0 | % | 41 | % | ||||||||||||||||||
Other income, net (4) |
$ | 4,955 | $ | (899 | ) | $ | 4,056 | $ | 582 | $ | | $ | 582 | 597 | % | |||||||||||||
Provision for income taxes (5) |
$ | 12,495 | $ | 26,001 | $ | 38,496 | $ | 9,855 | $ | 14,459 | $ | 24,314 | 58 | % | ||||||||||||||
Net income |
$ | 27,295 | $ | 46,605 | $ | 73,900 | $ | 16,079 | $ | 32,189 | $ | 48,268 | 53 | % | ||||||||||||||
Earnings per share diluted |
$ | 0.62 | $ | 1.69 | $ | 0.39 | $ | 1.18 | 43 | % | ||||||||||||||||||
Weighted average shares outstanding diluted |
43,782 | 43,782 | 40,826 | 40,826 | 7 | % |
(1) | The purchase accounting adjustment for deferred revenue is included within maintenance and services revenue and represents the write-down to fair value of the deferred maintenance revenue of Savvion and Iona Technologies at the date of each acquisition. | |
(2) | Stock option investigation expenses are included within general and administrative expenses and primarily represent professional services fees associated with the SECs investigation and shareholder derivative lawsuits related to the companys historical stock option grant practices. The credit amount for the nine months ended August 31, 2010 relates to insurance reimbursements in excess of previously estimated amounts. |
(3) | Stock-based compensation expense, representing the fair value of equity awards, is included in the following GAAP expenses: |
Three Months Ended August 31, 2010 | Three Months Ended August 31, 2009 | |||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
Cost of software licenses |
$ | 7 | $ | (7 | ) | $ | | $ | 8 | $ | (8 | ) | $ | | ||||||||||
Cost of maintenance and services |
225 | (225 | ) | | 238 | (238 | ) | | ||||||||||||||||
Sales and marketing |
1,340 | (1,340 | ) | | 1,445 | (1,445 | ) | | ||||||||||||||||
Product development |
1,066 | (1,066 | ) | | 1,037 | (1,037 | ) | | ||||||||||||||||
General and administrative |
1,351 | (1,351 | ) | | 6,121 | (6,121 | ) | | ||||||||||||||||
$ | 3,989 | $ | (3,989 | ) | $ | | $ | 8,849 | $ | (8,849 | ) | $ | | |||||||||||
Nine Months Ended August 31, 2010 | Nine Months Ended August 31, 2009 | |||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
Cost of software licenses |
$ | 22 | $ | (22 | ) | $ | | $ | 28 | $ | (28 | ) | $ | | ||||||||||
Cost of maintenance and services |
684 | (684 | ) | | 706 | (706 | ) | | ||||||||||||||||
Sales and marketing |
4,132 | (4,132 | ) | | 4,331 | (4,331 | ) | | ||||||||||||||||
Product development |
3,139 | (3,139 | ) | | 2,984 | (2,984 | ) | | ||||||||||||||||
General and administrative |
4,689 | (4,689 | ) | | 8,865 | (8,865 | ) | | ||||||||||||||||
$ | 12,666 | $ | (12,666 | ) | $ | | $ | 16,914 | $ | (16,914 | ) | $ | | |||||||||||
In addition, the restructuring expense for the three and nine months ended August 31, 2010 includes approximately $0.2 million and $0.5 million of stock-based compensation expense, respectively. | ||
(4) | The non-GAAP adjustment in other income for the nine months ended August 31, 2010 relates to an insurance settlement gain from a pre-acquisition contingency assumed as part of a prior acquisition. | |
(5) | The non-GAAP provision for income taxes was calculated reflecting an effective rate of 34.3% for the three and nine months ended August 31, 2010, and 33.5% for the three and nine months ended August 31, 2009. The difference between the effective rate under GAAP and the effective tax rate utilized in the preparation of non-GAAP financial measures primarily relates to the tax effects of stock-based compensation and amortization of acquired intangibles, which are excluded from the determination of non-GAAP net income. The non-GAAP effective tax rate for the nine months ended August 31, 2010 also excludes a one-time benefit of $2.5 million. |
Progress Software Corporation
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets
August 31, | November 30, | |||||||
(In thousands) | 2010 | 2009 | ||||||
Assets |
||||||||
Cash and short-term investments |
$ | 269,213 | $ | 224,121 | ||||
Accounts receivable, net |
84,966 | 98,872 | ||||||
Other current assets |
40,198 | 34,626 | ||||||
Total current assets |
394,377 | 357,619 | ||||||
Property and equipment, net |
57,963 | 59,625 | ||||||
Goodwill and intangible assets, net |
330,117 | 304,887 | ||||||
Other assets |
77,863 | 76,719 | ||||||
Total |
$ | 860,320 | $ | 798,850 | ||||
Liabilities and shareholders equity |
||||||||
Accounts payable and other current liabilities |
$ | 79,171 | $ | 85,681 | ||||
Short-term deferred revenue |
134,334 | 141,243 | ||||||
Total current liabilities |
213,505 | 226,924 | ||||||
Long-term deferred revenue |
3,342 | 4,511 | ||||||
Other liabilities |
10,335 | 11,963 | ||||||
Shareholders equity: |
||||||||
Common stock and additional paid-in capital |
314,562 | 247,265 | ||||||
Retained earnings |
318,576 | 308,187 | ||||||
Total shareholders equity |
633,138 | 555,452 | ||||||
Total |
$ | 860,320 | $ | 798,850 | ||||
Condensed Consolidated Statements of Cash Flows
Nine Months Ended | ||||||||
August 31, | August 31, | |||||||
(In thousands ) | 2010 | 2009 | ||||||
Cash flows from operations: |
||||||||
Net income |
$ | 27,295 | $ | 16,079 | ||||
Depreciation, amortization and other noncash items |
44,551 | 47,465 | ||||||
Other changes in operating assets and liabilities |
(2,023 | ) | (27,822 | ) | ||||
Net cash flows from operations |
69,823 | 35,722 | ||||||
Capital expenditures |
(7,091 | ) | (6,061 | ) | ||||
Redemptions and reclassification of auction-rate
securities |
1,250 | 24,925 | ||||||
Acquisitions, net of cash acquired |
(49,186 | ) | | |||||
Share issuances, net of repurchases |
38,478 | 2,262 | ||||||
Other |
(8,182 | ) | 11,140 | |||||
Net change in cash and short-term investments |
45,092 | 67,988 | ||||||
Cash and short-term investments, beginning of period |
224,121 | 118,529 | ||||||
Cash and short-term investments, end of period |
$ | 269,213 | $ | 186,517 | ||||
Progress Software Corporation
Reconciliation of Forward-Looking Guidance
Reconciliation of Forward-Looking Guidance
Diluted Earnings Per Share Range
Three Months Ended November 30, 2010 | ||
GAAP expectation |
$0.38 - $0.46 | |
Adjustment to exclude stock-based compensation |
$0.07 - $0.08 | |
Adjustment to exclude amortization of acquired intangibles |
$0.11 - $0.11 | |
Adjustment to exclude restructuring and transition expenses |
$0.04 - $0.07 | |
Non-GAAP expectation |
$0.64 - $0.68 | |
Twelve Months Ended November 30, 2010 | ||
GAAP expectation |
$1.01 - $1.09 | |
Adjustment to exclude stock-based compensation |
$0.29 - $0.30 | |
Adjustment to exclude amortization of acquired intangibles |
$0.45 - $0.45 | |
Adjustment to exclude restructuring and transition expenses |
$0.62 - $0.65 | |
Other adjustments |
($0.09) - ($0.09) | |
Non-GAAP expectation |
$2.32 - $2.36 | |
Twelve Months Ended November 30, 2011 | ||
GAAP expectation |
$1.60 - $1.80 | |
Adjustment to exclude stock-based compensation |
$0.27 - $0.29 | |
Adjustment to exclude amortization of acquired intangibles |
$0.36 - $0.36 | |
Adjustment to exclude restructuring and transition expenses |
$0.15 - $0.30 | |
Non-GAAP expectation |
$2.50 - $2.60 | |