Progress Software Reports First Quarter Results; Revenue up 13%; Operating Income and EPS show Dramatic Increases.BEDFORD, Mass. -- Progress Software Corporation (Nasdaq: PRGS PRGS Phosphoribosylglycinamide Synthetase ), a supplier of leading technology to develop, deploy, integrate and manage business applications, today announced results for its first quarter ended February 28, 2005. Revenue for the quarter was a record $97.7 million, up 13 percent (10 percent at constant currency) from $86.4 million in the first quarter of fiscal 2004. Software license revenue increased 11 percent (8 percent at constant currency) to $37.6 million from $33.9 million in the same quarter last year. On a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 127 percent to $14.4 million from $6.3 million in the first quarter of fiscal 2004. Net income increased 101 percent to $9.3 million from $4.6 million in the same quarter last year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 92 percent to 23 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. from 12 cents per share in the first quarter of fiscal 2004. The results for the first quarter of fiscal 2005 include an after-tax charge for amortization of acquired intangibles of $1.4 million. The results for the first quarter of fiscal 2004 include after-tax charges for amortization of acquired intangibles of $1.1 million and in-process research and development of $1.8 million. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, excluding the charges for amortization of acquired intangibles and in-process research and development, operating income increased 56 percent to $16.4 million from $10.5 million in the first quarter of fiscal 2004. Pro forma net income increased 42 percent to $10.7 million from $7.5 million in the same quarter last year. Pro forma diluted earnings per share increased 42 percent to 27 cents per share from 19 cents in the first quarter of fiscal 2004. The company's cash and short-term investments at the end of the quarter totaled $205 million. During the first quarter, the company purchased approximately 265,000 shares of its stock at a cost of $5.8 million. The company's existing repurchase authorization, under which 9.7 million shares remain available for repurchase, expires on September 30, 2005. "During the first quarter of 2005 we saw the payoff from our multi-year growth initiatives and significant increases in overall PSC (Public Service Commission) Same as PUC. profitability. Our ObjectStore and DataDirect operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon delivered excellent revenue growth while Sonic Software and the OpenEdge Division produced solid growth with substantial operating improvements," stated Joseph Alsop Joseph Wright Alsop V (October 11, 1910 – August 28, 1989) was an American journalist and syndicated newspaper columnist from the 1930s through the 1970s. Alsop was born into a socially prominent family in Avon, Connecticut; the son of Joseph Wright Alsop IV , co-founder and chief executive officer of PSC. "Our newer companies now account for over 30 percent of our software license revenue while revenue from OpenEdge continues to grow and is well positioned to deliver solid results for the balance of 2005." Highlights During the quarter, Progress Software received extensive media coverage on Interactive Taxi's use of the PeerDirect product line from ObjectStore to create a new kind of Internet portal designed for deployment in the backseat of taxicabs. Initial deployments of hundreds of these new "cybercabs" have begun in Boston, Chicago and San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . Passengers can now access the most accurate, up-to-date news from major national and local outlets, real-time traffic information and emergency news, and get fully localized listings of special events and happenings in and around the city, book restaurant and show reservations, buy movie tickets and pay their cab fare with a credit or debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. all on the computer screen embedded Inserted into. See embedded system. in the back of the front seat of the taxicab. PeerDirect technology enables lightning-fast access to Internet content even when no cellular data network connection is available. This innovative use of Progress(R) technology received broad media coverage, including stories in The Wall Street Journal, eWeek, Boston Business Journal, and on prime time TV. (Media coverage can be found at www.peerdirect.com/news/media_analyst/index.ssp) The IDC report "Worldwide Embedded Database (1) Database software that is included with an application rather than offered as a separate database management system (see DBMS). Tending to be compact and efficient, an embedded database generally includes fewer features than a full-blown DBMS. Management Systems 2003 Vendor Shares" published in December 2004 showed the Progress OpenEdge(R) RDBMS (Relational DataBase Management System) See relational database and DBMS. RDBMS - relational database retaining its worldwide leadership of the growing embedded database market, for the seventh consecutive year, with 19.7 percent market share, over 50% greater than the share of any other vendor in this market space. www.progress.com/embedded_database_leadership Sonic Software enhanced and expanded its Service Oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. Architecture (SOA (1) (Start Of Authority) The first record in a DNS zone file. See DNS records. (2) (Service Oriented Architecture) The modularization of business functions for greater flexibility and reusability. ) infrastructure for the enterprise with the release of version 6.1. The inventor and leading provider of the enterprise service bus (ESB (Enterprise Services Bus) A message broker that supports Web services. See message broker, messaging middleware and Web services. ), Sonic has extended its ESB-based SOA infrastructure line with two new products: the Sonic Collaboration Server(TM) for managing partner interactions; and the Sonic Database Service (TM), which simplifies access to relational data. Also in version 6.1, a new deployment tool simplifies SOA lifecycle What is a SOA Lifecycle? The SOA (Service Oriented Architecture) Lifecycle is a model that is intended to illustrate relationships and dependencies between various independent lifecycles that comprise a mature, enterprise SOA program. management, making it easier to deploy and continually upgrade services and processes across large-scale deployments. Version 6.1 also includes enhancements to Sonic ESB(R) and the Sonic Workbench(TM), increasing SOA development productivity with a new uniform service invocation invocation, n a prayer requesting and inviting the presence of God. model, which enables services of any type, from Web services (1) Loosely, any online service delivered over the Web. Such usage appears in articles from non-technical sources, but not in IT-oriented publications, because definition #2 below describes the correct use of the term. to databases, to be easily incorporated into the ESB. www.progress.com/new_soa_infrastructure Significant New Customer and Partner Wins, New Technology Adoptions and Major Deployments Significant new partners and customers adopting technology from PSC operating companies operating company A business that engages in transactions with outsiders. , or deploying solutions using PSC technology, include: Boehringer Ingelheim GmbH, Brasseries Kronenbourg, Carlson Marketing Group, CCIS (Common Channel Interoffice Signaling) The signaling technique used in the public switched telephone network that transmits voice conversations and control signals over separate networks. Inc., Charter Bank in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , Commonwealth Bank Of Australia, De Federale Politie, Federal Reserve Board, iMetals, Landmark Graphics Corporation Landmark Graphics Corporation was created in Houston in 1982 by John Mouton, Andy Hildebrand, H. Roice Nelson, and Bob Limbaugh, to develop the first system for interpreting 3D data from seismic surveys for the oil and gas industry. , Liberty Mutual Insurance Company, Maersk Sealand, NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. West, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Merchantile Exchange, Pac Software SA, Park Motor Sales Co., Perseus Development Corporation, Shinsei, Tegra Systems, Kroger Company, Washington, D.C., Wild Oats Market and Wollaston Alloys, Inc. Significant existing partners and customers adopting technology from different PSC operating companies, or making substantial additional deployments of PSC technology, include: Artemis International Solutions Corp., Australia Meat Holdings Ltd, Black & Decker, Cerner Corporation, Citigroup Global Markets, ComfortDelGro, Computer Associates International, CRS CRS Course CRS Certified Residential Specialist (real estate certification) CRS Central Reservation System CRS Can't Remember Stuff (polite form) CRS Cost Reduction Strategy CRS Consumer Relations Specialist Retail Systems, CSC (Card Security Code) A three- or four-digit number printed on the back of credit cards for security purposes. Called "Card Verification Value" (CVV) by Visa, "Card Validation Code" (CVC) by MasterCard and "Card Identification (CID) by American Express and Discover, Holdings, Delta Technology Inc., Diamant Boart Diamant Boart S.A. is a world-leading manufacturer and distributor of diamond tools and related equipment for the construction and stone market. The company was founded in 1937. , Distribution Solutions International, Eastman Kodak Company, Edify ed·i·fy tr.v. ed·i·fied, ed·i·fy·ing, ed·i·fies To instruct especially so as to encourage intellectual, moral, or spiritual improvement. Corporation, Energy Gdanska, Evoke e·voke tr.v. e·voked, e·vok·ing, e·vokes 1. To summon or call forth: actions that evoked our mistrust. 2. Software Corporation, Hewitt Associates Some of the information in this article may not be verified by . It should be checked for inaccuracies and modified to cite reliable sources. Hewitt Associates LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , Inovis, Inc., Iron Mountain, MarketAxess Holdings, Ministerio de Justicia y Seguridad de Mendoza, Morgan Stanley Capital International Morgan Stanley Capital International (MSCI) This firm publishes a number of well known benchmarks, such as the MSCI World Index. , Movaris, Inc., Nokia, Orange UK Ltd, Parametric Technology Corporation |Parametric Technology Corporation]] Parametric Technology Corporation (PTC)(NASDAQ: PMTC) provides Product Lifecycle Management (PLM) engineering CAD/CAM software and content management and dynamic publishing solutions to more than 40,000 companies worldwide. , Pepsi Business Solutions, Plumtree Software Plumtree Software was founded in 1996 by product managers and engineers from Oracle and Informix. The company was headquartered in San Francisco, California. Plumtree was founded on the premise that the technology used to build the World Wide Web could support new kinds of , Inc., Procter & Gamble Company, Reuters Financial Software, Rhodes University Rhodes University is a university in South Africa. The university is situated in Grahamstown in the Eastern Cape Province of South Africa. The town is famous for its numerous churches as well as its hosting of the National Arts Festival, which takes place annually in the , Ricoh Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. Ltd, Rimage Corporation Rimage Corporation (NASDAQ: RIMG), is a producer of CD-R and DVD-R production systems. Rimage has introduced several CD (compact disc) printing technologies including Prism Plus and Everest - two full color thermal printers. , SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications, Starwood Hotel & Resorts, Sterling Jewelers, Swiss Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Company, Toll Holdings, Universal Forest Products, Universal Technical Institute Universal Technical Institute, Inc., is a nationwide provider of technical education training for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. , Wachovia Corporation and Xerox Corporation (company) XEROX Corporation - http://xerox.com/. See also XEROX PARC, XEROX Network Services. . Business Outlook The company is providing the following guidance for the second fiscal quarter ending May 31, 2005: --Revenue is expected to be in the range of $98 million to $100 million. --GAAP operating income is expected to be in the range of $15 million to $16 million, including amortization of acquired intangibles of approximately $2 million. --GAAP diluted earnings per share are expected to be in the range of 27 cents to 29 cents. --On a pro forma basis, operating income is expected to be in the range of $17 million to $18 million, excluding amortization of acquired intangibles of approximately $2 million. --On a pro forma basis, diluted earnings per share are expected to be in the range of 30 cents to 32 cents, excluding approximately 3 cents per share for amortization of acquired intangibles. The company is providing the following guidance for the fiscal year ending November 30, 2005: --Revenue is expected to be in the range of $395 million to $405 million. --GAAP operating income is expected to be in the range of $63 million to $66 million, including amortization of acquired intangibles of approximately $8 million. --GAAP diluted earnings per share are expected to be in the range of $1.08 to $1.12. --On a pro forma basis, operating income is expected to be in the range of $71 million to $74 million, excluding amortization of acquired intangibles of approximately $8 million. --On a pro forma basis, diluted earnings per share are expected to be in the range of $1.21 to $1.25, excluding approximately 13 cents per share for amortization of acquired intangibles. This guidance does not include any expense associated with stock-based compensation. The company is currently evaluating the impact of the new accounting pronouncement regarding stock-based compensation, which is effective in the company's fourth quarter of fiscal 2005. Legal Notice Regarding Pro Forma Financial Information The company provides pro forma 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP). Such measures are intended to supplement GAAP and may be different from pro forma measures used by other companies. The company believes that the pro forma 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 of the company uses these pro forma 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 pro forma adjustments to the company's GAAP financial results is included in the tables below. Conference Call PSC's conference call to discuss its first quarter results will be Webcast live today at 9:00 a.m. Eastern via CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network 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 TD Waterhouse is the brand used for both British and Canadian brokerages within the TD Bank Financial Group. The brand originated as a United States brand for discount brokerage when TD purchased Waterhouse Securities. (www.tdwaterhouse.com) and Fidelity.com (www.fidelity.com). An archived version of the conference call will be available for replay. About Progress Software Corporation Progress Software Corporation (Nasdaq: PRGS) is a $300+ million global software industry leader. PSC supplies technologies for all aspects of the development, deployment, integration and management of business applications through its operating companies: Progress OpenEdge Division, DataDirect Technologies, ObjectStore and Sonic Software Corporation. Headquartered in Bedford, Mass., PSC can be reached on the Web at http://www.progress.com or by phone at +1-781-280-4000. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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, business and consumer use of the Internet, and the company's ability to penetrate international markets and manage its international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . 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 OpenEdge, and OpenEdge are trademarks or registered trademarks of Progress Software Corporation in the U.S. and other countries. Sonic ESB, Sonic Collaboration Server, Sonic Database Service, and Sonic Workbench are trademarks or registered trademarks of Sonic Software Corporation in the U.S. and other countries. Any other trademarks contained herein are the property of their respective owners.
Progress Software Corporation
Condensed Consolidated Statements of Income
Three Months Ended
-----------------------------
February February Percent
(In thousands except per share data) 28, 2005 29, 2004 Change
----------------------------------------------------------------------
Revenue:
Software licenses $37,555 $33,895 11 %
Maintenance and services 60,167 52,480 15 %
-------------------
Total revenue 97,722 86,375 13 %
-------------------
Costs and expenses:
Cost of software licenses 1,951 2,592
Cost of maintenance and services 14,036 12,826
Sales and marketing 38,329 36,180
Product development 16,399 14,609
General and administrative 10,652 9,676
Amortization of acquired intangibles 1,997 1,559
In-process research and development - 2,600
-------------------
Total costs and expenses 83,364 80,042 4 %
-------------------
Income from operations 14,358 6,333 127 %
Other income (expense), net (661) 392
-------------------
Income before provision for income taxes 13,697 6,725 104 %
Provision for income taxes 4,383 2,085
-------------------
Net income $9,314 $4,640 101 %
-------------------
Earnings per share:
Basic $0.25 $0.13 92 %
Diluted $0.23 $0.12 92 %
-------------------
Weighted average shares outstanding:
Basic 36,573 35,644 3 %
Diluted 39,721 38,955 2 %
-------------------
Pro Forma Condensed Consolidated Statements of Income
Three Months Ended February 28, 2005
------------------------------------
As Pro Forma
(In thousands except per share data) Reported Adjustments Pro
Forma
----------------------------------------------------------------------
Revenue:
Software licenses $37,555 $37,555
Maintenance and services 60,167 60,167
-------------------------------
Total revenue 97,722 97,722
-------------------------------
Costs and expenses:
Cost of software licenses 1,951 1,951
Cost of maintenance and services 14,036 14,036
Sales and marketing 38,329 38,329
Product development 16,399 16,399
General and administrative 10,652 10,652
Amortization of acquired
intangibles 1,997 $(1,997) -
In-process research and
development - - -
-------------------------------
Total costs and expenses 83,364 (1,997) 81,367
-------------------------------
Income from operations 14,358 1,997 16,355
Other income (expense), net (661) (661)
-------------------------------
Income before provision for income
taxes 13,697 1,997 15,694
Provision for income taxes 4,383 639 5,022
-------------------------------
Net income $9,314 $1,358 $10,672
-------------------------------
Earnings per share:
Basic $0.25 $0.29
Diluted $0.23 $0.27
-------------------------------
Weighted average shares outstanding:
Basic 36,573 36,573
Diluted 39,721 39,721
-------------------------------
Pro Forma Condensed Consolidated Statements of Income
Three Months Ended February 29, 2004
------------------------------------------
As Pro Forma Percent
(In thousands except per Reported Adjustments Pro Forma Change
share data)
----------------------------------------------------------------------
Revenue:
Software licenses $33,895 $33,895 11 %
Maintenance and
services 52,480 52,480 15 %
---------------------------------
Total revenue 86,375 86,375 13 %
---------------------------------
Costs and expenses:
Cost of software
licenses 2,592 2,592
Cost of maintenance and
services 12,826 12,826
Sales and marketing 36,180 36,180
Product development 14,609 14,609
General and
administrative 9,676 9,676
Amortization of
acquired intangibles 1,559 $(1,559) -
In-process research and
development 2,600 (2,600) -
---------------------------------
Total costs and
expenses 80,042 (4,159) 75,883 7 %
---------------------------------
Income from operations 6,333 4,159 10,492 56 %
Other income (expense), net 392 392
---------------------------------
Income before provision for
income taxes 6,725 4,159 10,884 44 %
Provision for income taxes 2,085 1,289 3,374
---------------------------------
Net income $4,640 $2,870 $7,510 42 %
---------------------------------
Earnings per share:
Basic $0.13 $0.21 38 %
Diluted $0.12 $0.19 42 %
---------------------------------
Weighted average shares
outstanding:
Basic 35,644 35,644 3 %
Diluted 38,955 38,955 2 %
---------------------------------
Progress Software Corporation
Condensed Consolidated Balance Sheets
February November
28, 30,
(In thousands) 2005 2004
----------------------------------------------------------------------
Assets
Cash and short-term investments $204,674 $191,267
Accounts receivable, net 70,857 63,503
Other current assets 24,548 23,485
-------------------
Total current assets 300,079 278,255
-------------------
Property and equipment, net 40,567 40,658
Goodwill and intangible assets, net 105,497 107,363
Other assets 19,992 20,538
-------------------
Total $466,135 $446,814
-------------------
Liabilities and shareholders' equity
Accounts payable and other current liabilities $60,246 $70,669
Short-term deferred revenue 117,919 101,106
-------------------
Total current liabilities 178,165 171,775
-------------------
Long-term debt 2,137 2,200
Long-term deferred revenue 6,665 5,861
Shareholders' equity:
Common stock and additional paid-in capital 74,316 70,085
Retained earnings 204,852 196,893
-------------------
Total shareholders' equity 279,168 266,978
-------------------
Total $466,135 $446,814
-------------------
Condensed Consolidated Statements of Cash Flows
Three Months Ended
-------------------
February February
28, 29,
(In thousands except per share data) 2005 2004
----------------------------------------------------------------------
Cash flows from operations:
Net income $9,314 $4,640
Depreciation, amortization and other noncash
charges 4,279 6,570
Other changes in operating assets and
liabilities 611 2,113
-------------------
Net cash flows from operations 14,204 13,323
Capital expenditures (2,106) (2,071)
Acquisitions, net of cash acquired - (87,520)
Share issuances, net of repurchases 938 5,178
Other 371 746
-------------------
Net change in cash and short-term investments 13,407 (70,344)
Cash and short-term investments, beginning of
period 191,267 219,131
-------------------
Cash and short-term investments, end of period $204,674 $148,787
-------------------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion