Source: Progress Software
Progress Software Corporation (NASDAQ: PRGS) today announced that Jay Bhatt plans to step down as President and Chief Executive Officer and as a Director to pursue another leadership opportunity.
Mr. Bhatt will continue in his roles at the Company until December 7, 2012. The Progress Board of Directors has initiated a search process and retained an executive search firm to identify a new President and CEO, and Mr. Bhatt will assist the Board in its search process to ensure a smooth transition. Phil Pead, Non-Executive Chairman of the Board of Directors, has been appointed Executive Chairman of the Board, effective immediately.
"The Board believes that Progress is on the right path and is committed to continuing to execute on the Company's strategic plan to increase growth, profitability and shareholder value," said Phil Pead, Executive Chairman of the Board of Directors. "Progress has actively implemented cost reduction initiatives and has substantially completed the reduction of our 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. In addition, we continue to make progress on our plan to divest 10 non-core product lines, which we expect to complete on schedule. Progress is improving its core business and has a strong and experienced management team, as well as an outstanding group of talented and dedicated employees in place, to help drive the Company's strategy forward."
"The Board will conduct a comprehensive search to identify the best candidate to serve as Progress' next CEO." Mr. Pead continued. "Effective immediately, I will take a very active operational role in the company as Executive Chairman, alongside Jay. I am looking forward to working closely with the senior management team, which remains committed to executing our strategic plan. On behalf of the Board, I thank Jay for his many contributions to developing the Company's strategic plan."
"I am pleased with the strides we have made in executing our strategic plan," said Jay Bhatt. "Progress today is solidly positioned for its next phase of growth and development and Ivelopment and I am fully committed to driving the execution of the Company's strategy through the end of the fiscal year. My decision to leave Progress to pursue another opportunity as the CEO of a privately held corporation in another segment of the software industry represents the fulfillment of a lifelong passion of mine and has nothing to do with my strong belief in the Company's ability to continue accomplishing its strategic priorities."
In light of the CEO transition, the Company may experience some slippage in revenue growth in the fiscal fourth quarter of 2012 and therefore is not re-affirming the guidance previously issued for the fiscal fourth quarter of constant currency revenue growth of -2% to 1%. The Company, however, anticipates it will achieve a core segment operating margin for the fiscal fourth quarter of 2012 of at least 25%. The Company maintains a strong cash flow position principally due to the high maintenance renewal rates in its core business.
Progress and the Board remain committed to returning capital of at least $350 million to shareholders over time and the Company is actively considering alternatives to complete this initiative by the end of 2013. Progress noted that in light of recent events, however, it will be unable to complete its anticipated $150 million in share repurchases by the end of fiscal 2012. The Board has authorized the Company to commence repurchases of stock as expeditiously as possible.