Progress Software Reports 2013 Fiscal Third Quarter Results
Progress Software Reports 2013 Fiscal Third Quarter Results
BEDFORD, Mass.--(BUSINESS WIRE)-- Progress Software Corporation (NAS: PRGS) , a global software company that simplifies and enables the development, deployment and management of business applications, today announced results for its fiscal third quarter ended August 31, 2013.
Revenue from continuing operations was $77.6 million compared to $74.4 million in the same quarter last year, a year over year increase of 4% on an actual and constant currency basis.
Additional financial highlights included:
On a GAAP basis in the fiscal third quarter of 2013:
- Income from operations was $9.7 million compared to $11.3 million in the same quarter last year;
- Income from continuing operations was $7.2 million compared to $7.7 million in the same quarter last year;
- Net income was $24.8 million compared to $5.8 million in the same quarter last year, and includes the pre-tax gain on the divestiture of the Apama product line of $35.9 million; and
- Diluted earnings per share from continuing operations was $0.13 compared to $0.12 in the same quarter last year.
On a non-GAAP basis in the fiscal third quarter of 2013:
- Income from operations was $21.4 million compared to $17.8 million in the same quarter last year;
- Operating margin was 28% compared to 24% in the same quarter last year;
- Income from continuing operations was $14.7 million compared to $12.4 million in the same quarter last year; and
- Diluted earnings per share from continuing operations was $0.27 compared to $0.19 in the same quarter last year.
Phil Pead, President and Chief Executive Officer of Progress Software, said, "Our third quarter performance continues to demonstrate solid progress as we execute on our strategic plan to be a leading Platform as a Service company. We exceeded our operating margin objectives and the announcement of Progress Pacific is resonating with our customers and partners. Revenue growth for the quarter was also positive as customers and partners continued to upgrade their existing applications and take advantage of new functionality across all of our solutions."
Other fiscal third quarter 2013 metrics and recent results included:
- Net cash received from the divestiture of the Apama product line was $37.7 million;
- Under the previously announced and implemented 10b5-1 plan to repurchase $100.0 million of common stock by December 31, 2013, the company has repurchased 2.7 million shares for $67.9 million through August 31, 2013;
- Cash, cash equivalents and short-term investments were $242.0 million;
- Cash outflows from operations were $1.9 million, including $14.6 million in tax payments for the gain realized on the Apama product line divestiture, compared to cash inflows from operations of $22.0 million in the same quarter in fiscal year 2012; and
- DSO from continuing operations was 62 days, compared to 56 days in the fiscal second quarter of 2013.
Progress Software provides the following guidance for the fiscal fourth quarter ending November 30, 2013:
- On a constant currency basis, revenue is expected to be between 4% and 6% growth compared to the fiscal fourth quarter of 2012; and
- Non-GAAP operating margin is expected to be 35%.
The non-GAAP operating margin guidance excludes the items we traditionally exclude from our non-GAAP reporting metrics: amortization of intangible assets of $0.7 million, stock-based compensation of $5.4 million, and $1.0 million of acquisition related costs, for a GAAP operating margin of 27%.
The Progress Software quarterly investor conference call to review its fiscal third quarter of 2013 will be broadcast live at 5:00 p.m. ET on Wednesday, September 25, 2013 on the investor relations section of the company's website, located at www.progress.com. Additionally, you can listen to the call by telephone by dialing 1-888-428-9480, pass code 9841658. The conference call will include only brief comments followed by questions and answers. An archived version of the conference call and supporting materials will be available on the Progress Software website within the investor relations section after the live conference call.
Legal Notice Regarding Non-GAAP Financial Information
Progress Software provides non-GAAP financial information as additional information for investors. These non-GAAP measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). 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. Additional information regarding the company's non-GAAP financial information is contained in the company's Current Report on Form 8-K filed with the Securities and Exchange Commission in connection with this press release, which is available on the Progress website at www.progress.com within the investor relations section.
Note Regarding Forward-Looking Statements
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like "believe," "may," "could," "would," "might," "should,""expect," "intend," "plan," "target," "anticipate" and "continue," the negative of these words, other terms of similar meaning or the use of future dates.
Forward-looking statements in this press release include, but are not limited to, statements regarding Progress's strategic plan; acquisitions; future revenue growth, operating margin and cost savings; product development, strategic partnering and marketing initiatives; the growth rates of certain markets; and other statements regarding the future operation, direction and success of Progress's business. There are a number of factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation:
(1) Market acceptance of Progress's strategic plan and product development initiatives; (2) pricing pressures and the competitive environment in the software industry and Platform-as-a-Service market; (3) Progress' ability to successfully manage transitions to new business models and markets, including our increased emphasis on a cloud and subscription strategy; (4) Progress's ability to make technology acquisitions and to realize the expected benefits and anticipated synergies from such acquisitions; (5) the continuing uncertainty in the U.S. and international economies, which could result in fewer sales of Progress's products and may otherwise harm Progress's business; (6) business and consumer use of the Internet and the continuing adoption of Cloud technologies; (7) the receipt and shipment of new orders; (8) Progress's ability to expand its relationships with channel partners and to manage the interaction of channel partners with its direct sales force; (9) the timely release of enhancements to Progress's products and customer acceptance of new products; (10) the positioning of Progress's products in its existing and new markets; (11) variations in the demand for professional services and technical support; (12) Progress's ability to penetrate international markets and manage its international operations; and (13) changes in exchange rates. For further information regarding risks and uncertainties associated with Progress's business, please refer to Progress's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended November 30, 2012 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2013 and May 31, 2013. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.
Progress Software Corporation
Progress Software Corporation (NAS: PRGS) is a global software company that simplifies the development, deployment and management of business applications on-premise or in the cloud, on any platform or device, to any data source, with enhanced performance, minimal IT complexity and low total cost of ownership. Progress Software can be reached at www.progress.com or 1-781-280-4000.
Progress is a trademark 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|Three Months Ended||Nine Months Ended|
|(In thousands, except per share data)|
|Maintenance and services||51,912||51,734||—||%||158,096||158,154||—||%|
|Costs of revenue:|
|Cost of software licenses||1,587||1,375||15||%||5,033||4,117||22||%|
|Cost of maintenance and services||6,403||7,974||(20||)%||21,043||22,013||(4||)%|
|Amortization of acquired intangibles||529||139||281||%||811||522||55||%|
|Total costs of revenue||8,519||9,488||(10||)%||26,887||26,652||1||%|
|Sales and marketing||24,554||24,970||(2||)%||79,086||67,085||18||%|
|General and administrative||13,660||14,375||(5||)%||42,390||47,789||(11||)%|
|Amortization of acquired intangibles||211||207||2||%||549||622||(12||)%|
|Total operating expenses||59,398||53,594||11||%||176,289||155,188||14||%|
|Income from operations||9,661||11,289||(14||)%||39,840||49,130||(19||)%|
|Other (expense) income, net||177||357||(50||)%||(663||)||876||(176||)%|
|Income from continuing operations before income taxes||9,838||11,646||(16||)%||39,177||50,006||(22||)%|
|Provision for income taxes||2,634||3,902||(32||)%||14,018||17,546||(20||)%|
|Income from continuing operations||7,204||7,744||(7||)%||25,159||32,460||(22||)%|
|Income (loss) from discontinued operations, net||17,639||(1,906||)||1,025||%||34,712||(21,041||)||265||%|
|Earnings per share:|
|Net income per share||$||0.46||$||0.09||411||%||1.08||$||0.18||500||%|
|Net income per share||$||0.46||$||0.09||411||%||$||1.06||$||0.18||489||%|
|Weighted average shares outstanding:|
CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash, cash equivalents and short-term investments||$||241,982||$||355,217|
|Accounts receivable, net||53,620||70,793|
|Other current assets||40,035||32,779|
|Assets held for sale||—||68,029|
|Total current assets||335,637|