Progress Software CorporationReports Second Quarter Financial Results; Company Reports All-TimeHigh For Revenue
June 16, 1999 07:31 AM
BEDFORD, Mass.--(BUSINESS WIRE)--June 16, 1999--Progress Software
Corporation PRGS , a leading supplier of application development,
deployment and management products, today reported results for its
second quarter, ended May 31, 1999. Revenue reached a new record,
increasing 24% to $70.8 million, up from $57.1 million in the same
quarter last year. Operating income was $10.4 million and represented
an increase of 75% over the same quarter in 1998. Net income was $7.8
million, up 68% from $4.7 million in the same quarter last year.
Diluted earnings per share of $0.40 represented an increase of 67%
over the $0.24 achieved in the second quarter of 1998.
The company's revenue was adversely affected by the strengthening of
the U.S. dollar during 1999 as compared to 1998. On a constant
currency basis, revenue in the second quarter grew by 27% as compared
to the second quarter of 1998.
During the second quarter, the company purchased 708,000 shares of its
stock at a cost of $16.3 million. Since beginning its share buybacks
in the first quarter of 1996, the company has purchased approximately
5.7 million shares of its common stock at a cost of $89.4 million. The
company's cash and short-term investments at the end of the quarter
totaled $113 million. The company's accounts receivable days sales
outstanding was 55 days at quarter end.
President Joseph W. Alsop said that Progress Software's independent
software vendors (ISVs) continue to make strong gains in the business
applications market. "Companies are attracted to Progress
Software-based solutions because they are easier to install and cost
less to maintain than competing applications. Applications based on
Progress Software's technology are also highly scalable, able to
perform well under the shifting conditions inherent in an
Internet-based application infrastructure."
Alsop said the benefits that Web-based applications bring to
businesses of all sizes continue to be a focal point for the company,
which made strategic announcements in the quarter that will further
drive the evolution of business-to-business applications on the
Internet.
Quarterly Highlights
At its Worldwide Users Conference & Expo in Boston in May, Progress
Software hosted a record 1,400 customers and partners from 40
countries. There, the company announced a program to enable its more
than 2,000 ISVs worldwide to extend their 5,000 packaged applications
to the application service provider (ASP) model. This model enables
small- to medium-sized organizations to rent previously inaccessible,
best-of-breed applications without making up-front investments in
internal IT systems or staff. Analysts with Forrester Research, an
industry research firm, expect the rentable applications market to
reach $6.4 billion by 2001.
"Progress Software has extensive experience in creating and managing a
successful channel business model and in helping ISVs create
cost-efficient, scalable applications. As a result, we are in a better
position than other application vendors to lead the ASP market. With
this program, our ISVs will be able to quickly open their applications
on the Internet to an entirely new and potentially lucrative customer
base," Alsop noted.
Also at the conference, Progress Software unveiled its Universal
Application Architecture (UAA) development plans for 1999 and beyond.
UAA now includes the tools and strategic framework required to build
new, highly integrated, business-to-business applications that operate
on the Internet. Applications created and deployed within the UAA
framework will enable the next generation of electronic commerce:
fully automated business-to-business processes between vendors and
their partners, suppliers and customers.
Progress Software also announced in the quarter that it has widened
its lead in the embedded database market, staying ahead of Oracle,
Sybase and all others according to the latest GartnerGroup study. For
the second consecutive year, Progress Software is identified by
Dataquest Corporation as the leading vendor of embedded databases,
with 19% of the $400 million worldwide market. Dataquest, a division
of the GartnerGroup, recently reported that the embedded database
market grew 19% in 1998.
About Progress Software
Progress Software Corporation PRGS is a global supplier of software
products and services for developing, deploying and managing business
solutions across all computing and network environments. Our products,
which are installed in over 60% of Fortune 100 companies, include
application servers, databases, development tools and application
management products for Internet/Web, extranet and intranet
applications.
Our customers operate in 100 countries, are supported by more than
1,200 employees worldwide, and deploy annually over $1.5 billion in
Progress Software-based applications built by 2,000+ independent
software vendors (ISVs). For more information, visit www.progress.com
or call +1-781-280-4000.
Progress is a registered trademark of Progress Software Corporation.
Progress Apptivity and other products of Progress Software referenced
herein are trademarks of Progress Software Corporation. All other
trademarks contained herein are the property of their respective
owners.
Condensed Consolidated Statements of Operations
Three Months Ended May 31,
1999 1998 Percent
(In thousands except (unaudited) (unaudited) Change
per share data)
Revenue:
Software licenses $32,124 $27,686 16 %
Maintenance and
services 38,626 29,420 31 %
Total revenue 70,750 57,106 24 %
Costs and expenses:
Cost of software
licenses 3,140 2,438
Cost of maintenance
and services 13,198 11,833
Sales and marketing 27,131 22,036
Product development 9,895 8,133
General and
administrative 7,001 6,727
Total costs and expenses 60,365 51,167 18 %
Income from operations 10,385 5,939 75 %
Other income, net 1,145 1,035
Income before provision
for income taxes 11,530 6,974 65 %
Provision for income taxes 3,690 2,301
Net income $ 7,840 $ 4,673 68 %
Basic earnings per share $ 0.46 $ 0.27 70 %
Weighted average shares
outstanding (basic) 17,218 17,289 0 %
Diluted earnings per share $ 0.40 $ 0.24 67 %
Weighted average shares
outstanding (diluted) 19,429 19,491 0 %
Six Months Ended May 31
(In thousands except 1999 1998 Percent
per share data) (unaudited) (unaudited) Change
Revenue:
Software licenses $ 65,253 $ 55,332 18 %
Maintenance and
services 72,642 55,920 30 %
Total revenue 137,895 111,252 24 %
Costs and expenses:
Cost of software
licenses 6,246 5,273
Cost of maintenance
and services 25,711 21,471
Sales and marketing 52,914 44,588
Product development 19,189 15,247
General and
administrative 13,795 13,866
Total costs and
expenses 117,855 100,445 17 %
Income from operations 20,040 10,807 85 %
Other income, net 1,926 1,462
Income before provision
for income taxes 21,966 12,269 79 %
Provision for income taxes 7,029 4,049
Net income $ 14,937 $ 8,220 82 %
Basic earnings per share $0.86 $0.48 79 %
Weighted average shares
outstanding (basic) 17,270 17,288 0 %
Diluted earnings per share $0.76 $0.43 77 %
Weighted average shares
outstanding (diluted) 19,751 18,974 4 %
Condensed Consolidated Balance Sheets
May 31, 1999 November 30, 1998
(In thousands) (unaudited) (note)
Assets
Cash and short-term investments $ 113,077 $ 113,999
Accounts receivable, net 43,473 40,779
Other current assets 18,965 18,270
Total current assets 175,515 173,048
Property and equipment, net 21,222 22,458
Capitalized software costs, net 3,842 4,742
Other assets 6,541 6,460
Total $ 207,120 $ 206,708
Liabilities and shareholders'
equity
Accounts payable and other
current liabilities $ 44,878 $ 53,918
Deferred revenue 55,941 49,942
Total current liabilities 100,819 103,860
Minority interest in subsidiary 61 155
Shareholders' equity:
Common stock, $0.01 par value 168 171
Additional paid-in capital 22,781 18,795
Retained earnings 84,570 84,115
Translation & unrealized
investment valuation (1,279) (388)
Total shareholders' equity 106,240 102,693
Total $ 207,120 $ 206,708
(Note) Derived from audited financial statements.
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