Progress Software Corporation (PRGS), a global software company that simplifies and enables the development, deployment and management of business applications, announced today results for its fiscal fourth quarter and fiscal year ended November 30, 2012.
As of the fiscal fourth quarter of 2012, the results of all non-Core product lines are reported in discontinued operations because those product lines have been divested or are under agreement to be divested, and have also met the accounting criteria for such classification. Continuing operations include the results of the Core product lines and principally general and administrative costs related to the non-Core product lines, which do not qualify for discontinued operations. References to the Core product lines or Core segment include Progress OpenEdge platform, DataDirect Connect products and the Decision Analytics portfolio (comprising Progress Apama, Progress Corticon BRMS and the Progress Control Tower). References to the non-Core product lines include Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic.
Revenue from continued and discontinued operations was $121.7 million in the fiscal fourth quarter of 2012, compared to $136.3 million in the same quarter last year. Non-GAAP EPS was $0.42 in the fiscal fourth quarter of 2012, compared to $0.34 in the same quarter last year.
Consolidated results in the fiscal fourth quarter of 2012 were:
- Revenue was $91.3 million, essentially flat on a constant currency basis year over year, or down 2% using actual exchange rates, and excludes $30.5 million and $42.8 million of revenue from discontinued operations in the current quarter and same quarter last year, respectively;
- Income from operations was $16.9 million compared to $28.4 million in the same quarter last year;
- Income from continuing operations was $11.6 million compared to $17.2 million in the same quarter last year;
- Diluted earnings per share from continuing operations was $0.18 compared to $0.27 in the same quarter last year; and
- Non-GAAP diluted earnings per share from continuing operations was $0.23 compared to $0.36 in the same quarter last year.
Results for the Core segment in the fiscal fourth quarter of 2012 were:
- Core revenue was $91.3 million, essentially flat to the same quarter last year on a constant currency basis, or a decrease of 2% using actual exchange rates;
- Core income from operations was $27.2 million compared to $42.7 million in the same quarter last year; and
- Operating margin for the Core segment was 30%.
Phil Pead, President and Chief Executive Officer of Progress Software, said, "Overall, we are pleased with our performance in the fiscal fourth quarter. During the quarter we remained focused on executing on our strategic plan and now enter 2013 with substantially all non-Core assets divested. I am also pleased that we have hired Chris Perkins, who will start as Chief Financial Officer on February 1, 2013."
Mr. Pead continued, "Our focus for 2013 is to improve our operating margins, build the foundation for future revenue growth by expanding the functionality of our existing solutions and begin to leverage our Core competencies to enable application development using our platform, data integration and connectivity and data analytics in the Cloud."
Other fiscal fourth quarter 2012 results included the following:
- Cash flows from operations were $28.4 million, an increase from $8.2 million in the same quarter in fiscal year 2011;
- Net cash received from the divestitures of FuseSource and Shadow was $46.6 million;
- The company repurchased 4.5 million shares of its common stock for $88.4 million as part of its previously announced and implemented 10b5-1 plan to repurchase $250.0 million by June 30, 2013;
- Cash, cash equivalents and short-term investments increased to $355.2 million from $261.4 million at the end of the fiscal fourth quarter of 2011;
- DSO from continuing operations was 70 days, compared to DSO of 73 days in the fiscal fourth quarter of 2011; and
- Headcount was 1,395, down 7% from the end of last quarter and down 20% from one year ago.
Progress Software provides the following guidance for the fiscal first quarter ending February 28, 2013:
- On a constant currency basis, revenue growth is expected to be essentially flat compared to the fiscal first quarter of 2012; and
- Non-GAAP operating margin is expected to be in the range of 20% to 24%.
The non-GAAP operating margin guidance excludes the items we traditionally exclude from our non-GAAP reporting metrics: amortization of intangible assets of $0.5 million to $0.6 million and stock-based compensation of $5.5 million to $6.4 million, for a GAAP operating margin in the range of 12% to 16%.