Progre Software Reports 04 Fiscal Second Quarter Results

June 26, 2014

Progress Software Reports 2014 Fiscal Second Quarter Results BEDFORD, Mass.--(BUSINESS WIRE)-- Progress Software Corporation (NASDAQ:PRGS), a global software company that simplifies and enables the development, deployment and management of business applications, today announced results for its fiscal second quarter ended May 31, 2014.

Revenue from continuing operations was $80.8 million compared to $81.7 million in the same quarter last year, a year over year decrease of 1% on an actual currency basis and 2% on a constant currency basis.

Additional financial highlights included:

On a GAAP basis in the fiscal second quarter of 2014:

Income from operations was $20.3 million compared to $14.4 million in the same quarter last year;

Income from continuing operations was $12.8 million compared to $8.1 million in the same quarter last year;

Net income was $12.8 million compared to $3.9 million in the same quarter last year; and

Diluted earnings per share from continuing operations was $0.25 compared to $0.15 in the same quarter last year.

On a non-GAAP basis in the fiscal second quarter of 2014:

Income from operations was $28.4 million compared to $23.7 million in the same quarter last year;

Operating margin was 35% compared to 29% in the same quarter last year;

Income from continuing operations was $19.2 million compared to $15.0 million in the same quarter last year; and

Diluted earnings per share from continuing operations was $0.37 compared to $0.27 in the same quarter last year.

Phil Pead, CEO at Progress, said, We are pleased with our second quarter performance. Progress continues to add new features and functionality to its core products while also introducing new offerings, such as comprehensive mobile app development capabilities in our Pacific PaaS platform. We are also very excited about the new opportunities and innovative technologies that our Modulus acquisition provides as we broaden our cloud, hybrid and on-premise offerings.

Other fiscal second quarter 2014 metrics and recent results included:

Cash, cash equivalents and short-term investments were $226.6 million;

Cash inflows from operations were $17.1 million compared to cash inflows from operations of $13.6 million in the same quarter in fiscal year 2013;

DSO was 65 days, compared to 71 days in the fiscal first quarter of 2014; and

Under the previously announced authorization by the Board of Directors to repurchase up to $100 million of common stock, the company has repurchased 1.6 million shares for $35.0 million as of May 31, 2014.

In addition, during the second quarter of fiscal year 2014, Progress acquired Cincinnati, Ohio-based Modulus LLC, a privately-held company that provides a platform-as-a-service (PaaS) for easily hosting, deploying, scaling and monitoring data-intensive, real-time applications using powerful, rapidly growing Node.js and MongoDB technologies. Also during the quarter, Progress announced the release of Easyl, our latest product offering included in our Pacific platform.

Business Outlook

Progress Software provides the following updated guidance for the fiscal year ending November 30, 2014:

Revenue is expected to be between $331 million and $338 million;

Non-GAAP earnings per share is expected to be between $1.38 and $1.45;

Non-GAAP operating margin is expected to be between 33% and 34%;

Free cash flow is expected to be between $79 million and $83 million; and

Non-GAAP effective tax rate is expected to be 33%.

Progress Software provides the following guidance for the third fiscal quarter ending August 31, 2014:

Revenue is expected to be between $78 million and $81 million; and

Non-GAAP earnings per share is expected to be between $0.32 and $0.35.

Free cash flow is equal to cash flows from operating activities less purchases of property and equipment and capitalized software development costs.

Conference Call

The Progress Software quarterly investor conference call to review its fiscal second quarter of 2014 will be broadcast live at 5:00 p.m. ET on Thursday, June 26, 2014 and can be accessed on the investor relations section of the companys website, located at www.progress.com. Additionally, you can listen to the call by telephone by dialing 1-888-455-2296, pass code 5822388. The conference call will include 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 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. Additional information regarding the companys non-GAAP financial information is contained in the companys Current Report on Form 8-K furnished to 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

LINK:	http://investors.progress.com/releasedetail.cfm?ReleaseID=856744...
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