This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Progress Software Reports 2012 Fiscal Third Quarter Results

Progress Software Corporation (NASDAQ: PRGS), a global software company that simplifies and enables the development, deployment and management of business applications, announced today results for its fiscal third quarter ended August 31, 2012.

Results for the Core segment, consisting of the Progress® OpenEdge ® platform, DataDirect® Connect products and the Decision Analytics portfolio (comprising Progress Apama®, Progress Corticon® BRMS and the Progress Control Tower®), in the fiscal third quarter of 2012 were:
  • On a constant currency basis, Core revenue declined 6% year over year; in comparison, Core revenue declined 10% in the fiscal second quarter of 2012 versus the fiscal second quarter of 2011;
  • Using actual exchange rates, Core revenue declined 12%;
  • Core income from operations was $20.5 million compared to $39.3 million in the same quarter last year; and
  • Operating margin for the Core segment was 26%.

Consolidated results in the fiscal third quarter of 2012 were:
  • Revenue was $107.2 million compared to $124.5 million in the same quarter last year, a decrease of 9% on a constant currency basis, or 14% using actual exchange rates, and excludes $4.8 million and $3.8 million of revenue from our FuseSource product line, which is included in discontinued operations, in the current quarter and same quarter last year, respectively;
  • Income from operations was $14.0 million compared to $14.3 million in the same quarter last year;
  • Income from continuing operations was $8.0 million compared to $9.6 million in the same quarter last year;
  • Loss from discontinued operations, which is related to our FuseSource product line, was $2.1 million;
  • Diluted earnings per share from continuing operations was $0.12 compared to $0.14 in the same quarter last year; and
  • Non-GAAP diluted earnings per share from continuing operations was $0.31 compared to $0.32 in the same quarter last year.

Jay Bhatt, president and chief executive officer, Progress Software, said, "Last quarter our tone was optimistic long term but cautious regarding our fiscal third quarter. We felt this was prudent given the global economy, seasonality within our business and the significant amount of change required to execute our strategic plan announced on April 25th. Our third quarter results reflect improvements on many fronts over the second quarter and remain on track. Although several challenges and continued changes remain to fulfill our transformation, I am pleased to report that during our third quarter we successfully executed against our strategic plan. This includes the implementation of our cost reduction program, the hiring of several key executives, the acceleration of discussions regarding divestitures and the gradual improvement of both our top line Core segment trajectory and margin."

Other fiscal third quarter 2012 results included the following:
  • Cash flows from operations were $22.0 million, a decrease from $29.1 million in the same quarter in fiscal 2011;
  • Cash, cash equivalents and short-term investments increased to $352.2 million from $261.4 million at the end of the fiscal fourth quarter of 2011;
  • DSO was 63 days, down 4 days from the fiscal second quarter of 2012 and up 4 days year-over-year; and
  • Headcount was 1,506, down 6% from the end of last quarter and down 12% from one year ago.

Progress Software continues to execute aggressively on its strategic plan, including the following specific actions:
  • Cost Savings and Re-Investment - The company continued cost reduction efforts during the fiscal third quarter with reductions in our EMEA workforce completed and facilities consolidations underway. The company is on target to reduce its budgeted 2012 expense run rate by approximately $55 million gross value, with the net reduction of $40 million after reinvesting $15 million back into the Core segment. Some of these investments began during the fiscal third quarter;
  • Share Repurchase - The company remains committed to completing $150 million of its $350+ million authorized share repurchase program this fiscal year, with the balance to come in fiscal 2013; and
  • Divest Non-Core Product Lines - The company completed its previously announced sale of FuseSource to Red Hat. The company continues to make substantial progress toward the divestiture of the nine remaining product lines identified as non-Core in its strategic plan.

Business Outlook

Progress Software provides the following guidance for the fiscal fourth quarter ending November 30, 2012:
  • On a constant currency basis, Core revenue growth is expected to be -2% to 1% compared to the fiscal fourth quarter of 2011; and
  • Core segment operating margin is expected to be in the range of 25% to 30%.

The Core segment operating margin guidance excludes the operating income of the non-Core segment and also excludes the items we traditionally exclude from our segment reporting metrics.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs