Progress Software reports second quarter financial results
Friday June 20 7:30 AM EDT
Company Press Release
BEDFORD, Mass.--(BUSINESS WIRE)--June 20, 1997--Progress Software Corporation (NASDAQ:PRGS) today
announced results for its second quarter ended May 31, 1997.
Revenue for the quarter increased by 8% to $44,831,000, up from $41,662,000 in the comparable quarter last year.
Operating income was $1,383,000 for the second quarter of 1997, as compared to an operating loss of $789,000 in the same
quarter last year. Net income was $2,042,000, up from $155,000 in the second quarter of 1996. Earnings per share was
$.16, up from $.01 in the second quarter of 1996.
For the six months ended May 31, 1997, revenue was $90,175,000, essentially flat with the $90,044,000 in 1996. Operating
income was $3,579,000, down from $5,066,000 in 1996 and net income was $4,020,000, down from $4,574,000 in 1996.
Earnings per share for the first six months of 1997 was $.31, as compared to $.34 in 1996.
The Company's revenue and operating income in the second quarter and for the first six months of 1997 were adversely
affected by the continued strengthening of the U.S. dollar during 1997 as compared to 1996, but the earnings impact was
somewhat mitigated by the Company's foreign exchange hedging programs.
During the second quarter, Progress Software purchased 488,200 shares of its common stock at a cost of $8,424,000. For
the first six months of 1997, the Company has purchased 839,200 shares of its common stock at a cost of $14,396,000. The
Company's cash and short-term investments at the end of the second quarter totaled $95,959,000. The Company's accounts
receivable days sales outstanding was 73 days at the end of the second quarter of 1997 as compared to 84 days a year ago.
In his quarterly letter to shareholders, Progress Software President Joseph W. Alsop wrote, ``In the quarter, we released three
new products that extend our ability to address the needs of a marketplace that is ready and eager to realize the benefits of the
Internet and to expand the capabilities of their current development and deployment technologies. Also, the success of our
1997 Worldwide Users Conference & Expo and NetGain, our first Internet Business Summit, confirmed that our products and
technology vision continue to gain widespread recognition and the market is responding favorably.''
In the Quarter
In May, Progress Software introduced PROGRESS Version 8.2, the latest release of the company's flagship application
development and deployment environment. Version 8.2 expands upon the core strengths of the PROGRESS development
environment delivering 32-bit Windows functionality, significant database enhancements and the integration of the Actuate
Reporting System, a leading server-centric reporting tool that is rapidly becoming the industry standard.
Several leading application developers are successfully using Version 8.2 including: QAD, Inc., Software Development, Inc.,
Systems Design & Development, Inc. and Foresight Software, Inc.
Shipments of Progress Software's DeltaCast began on June 3. DeltaCast is an advanced electronic software distribution
management tool that leverages the power of the Internet, intranets and extranets to radically lower the cost of deploying
applications.
Also in the quarter, Progress Software hosted its 1997 Worldwide Users Conference & Expo in Boston, Massachusetts from
June 16 to 18. This year's event set attendance records with over 1,200 customers, who came to participate in the more than
50 in-depth breakout sessions, hands-on workshops and a sold-out Product Expo.
On June 19, Progress Software along with Information Week and VARBusiness magazines, co-sponsored NetGain, the
Company's first Internet Business Summit. NetGain was a one-day forum providing critical information from industry leaders
about the development and implementation of effective Internet business strategies. The event exceeded expectations by
drawing over 1,400 attendees, many of whom were new potential customers. The attendees' enthusiasm and desire for
knowledge helped make NetGain a major success and confirmed market readiness for the products needed to capitalize on
the Internet Business Revolution.
At the Worldwide Users Conference & Expo, Progress Software introduced WebSpeed 2.0, the Company's second
generation development and deployment environment that enables organizations to open their businesses to the Web to
increase sales, drive down costs and improve customer service across the Internet, intranets or extranets. WebSpeed is the
first product that solves the key problems that have traditionally prevented companies from using the Internet as a strategic
business platform: it provides the scalability and performance required to support fluctuating and unpredictable numbers of
users, and delivers a highly productive and unique Web-centric development environment that enables rapid application
development and efficient maintenance.
WebSpeed has already gained wide acceptance in the marketplace with an established client base who have
WebSpeed-based Internet, intranet and extranet applications already in production. Many of these customers are well-known,
global organizations using the Web to strategically position their companies for the future.
WebSpeed Customer Successes
CIGNA, a global financial services company, designed a WebSpeed- based intranet to provide customers with a variety of
``self-serve'' capabilities to track their investments without having to depend on a customer service representative.
Heineken, Europe's largest brewery, developed a WebSpeed-based extranet that improves distribution efficiency by allowing
its distributors direct access to Heineken's ordering system. Distributors have a more efficient way to order products, while
Heineken enjoys a significant reduction in shipping errors.
REI, one of the largest outdoor gear and clothing companies in the United States operating 47 retail stores, developed a
WebSpeed-based application that extends its distribution channels to the Internet. REI developed a highly integrated,
e-commerce site that has reported sales above expectations and often outsells several of its conventional stores.
The SABRE Group, the world's largest travel technology business, chose WebSpeed to develop an application that will
provide tour operators with direct access from the Web into its booking systems. SABRE's WebSpeed-based application
gives tour operators enhanced flexibility in assembling and expanding tour packages.
Except for the historical information contained herein, the matters discussed in this press release are forward-looking
statements that involve risks and uncertainties. Statements indicating that the Company ``expects,'' ``estimates,'' ``believes,'' ``is
planning'' or ``plans to'' are forward-looking, as are other statements concerning future financial results, product offerings or
other events that have not yet occurred. There are several important factors which could cause actual results or events to differ
materially from those anticipated by the forward-looking statements contained in this press release. Such factors include, but
are not limited to, the receipt and shipment of new orders, the timely release of enhancements to the Company's products,
which could be subject to software release delays, the growth rates 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, consumer use of the Internet, and international operations.
Additional information on these and other risk factors which could affect the Company's financial results is included in the
Company's Securities and Exchange Commission reports including the report on Form 10-Q for the first quarter ended
February 28, 1997.
The Company reserves the right to change its budget, product focus, product release dates, long-term plans and financial
projections from time to time as circumstances warrant. The Company undertakes no obligation to update or modify the
information contained in this press release in the future when such changes occur.
Progress Software Corporation
Progress Software Corporation, (www.progress.com) headquartered in Bedford, Mass., is a leading supplier of application
development, database technology and support services to business, government and industry worldwide. Its WebSpeed
product enables the rapid development and deployment of robust business applications so that customers, partners and
vendors can access corporate databases to conduct Internet, intranet or extranet-based business transactions. The
PROGRESS product line enables the efficient development and deployment of enterprise-class client/server applications.
Progress Software employs 1,100 professionals in nearly 50 offices across North America, Europe, Asia, Australia, and Latin
America. More than 2,300 Application Partners (APs) use Progress Software products to build and deploy applications
across a broad spectrum of platforms -- 96 the Internet, intranet, client/server, and host-terminal. These APs sold more than
$1.5 billion worth of PROGRESS-based applications globally in 1996.
PROGRESS is a registered trademark and WebSpeed and DeltaCast are trademarks of Progress Software Corporation.
Actuate Reporting System is a registered trademark of Actuate Software Corporation. All other products and company names
mentioned herein may be trademarks or registered trademarks of their respective companies.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Percent
May 31, 1997 May 31, 1996 Change
(unaudited) (unaudited)
Revenue:
Software licenses $22,975 $20,730 11%
Maintenance and support
services 21,856 20,932 4%
Total revenue 44,831 41,662 8%
Costs and expenses:
Cost of software licenses 2,388 2,231
Cost of maintenance and
support services 7,222 7,008
Sales and marketing 21,364 22,083
Product development 6,776 5,866
General and administrative 5,698 5,263
Total costs and expenses 43,448 42,451 2%
Income (loss) from operations 1,383 (789) 275%
Other income, net 1,712 1,025
Income before provision for
income taxes 3,095 236 1,211%
Provision for income taxes 1,053 81
Net income $2,042 $155 1,217%
Income per common share $0.16 $0.01 1,500%
Weighted average number of common
and common equivalent shares
outstanding 13,002 13,121 (1)%
-0-
Six Months Ended Percent
May 31, 1997 May 31, 1996 Change
(unaudited) (unaudited)
Revenue:
Software licenses $47,616 $49,723 (4)%
Maintenance and support
services 42,559 40,321 6%
Total revenue 90,175 90,044 0%
Costs and expenses:
Costs of software licenses 4,737 4,581
Cost of maintenance and
support services 14,180 14,010
Sales and marketing 42,922 44,007
Product development 13,181 11,891
General and administrative 11,576 10,489
Total costs and expenses 86,596 84,978 2%
Income (loss) from operations 3,579 5,066 (29)%
Other income, net 2,512 1,865
Income before provision for
income taxes 6,091 6,931 (12)%
Provision for income taxes 2,071 2,357
Net income $4,020 $4,574 (12)%
Income per common share $0.31 $0.34 (9)%
Weighted average number of common
and common equivalent shares
outstanding 12,946 13,445 (4)%
-0-
Condensed Consolidated Balance Sheets
(in thousands) May 31, 1997 November 30, 1996
(unaudited) (note)
Assets
Cash and short-term investments $95,959 $97,323
Accounts receivable, net 30,863 34,452
Other current assets 13,105 9,176
Total current assets 139,927 140,951
Property and equipment, net 23,027 24,230
Capitalized software costs, net 5,616 5,428
Other assets 2,242 2,579
Total $170,812 $173,188
Liabilities and Shareholders' Equity
Current portion of long-term debt -- $37
Accounts payable and other current
liabilities $29,138 29,342
Deferred revenue 33,068 27,365
Total current liabilities 62,206 56,744
Deferred income taxes 2,382 2,345
Long-term debt -- 85
Minority interest in subsidiary 528 221
Shareholders' equity:
Common Stock, $.01 per value 120 126
Additional paid-in capital 29,692 41,309
Retained earnings 76,300 72,280
Translation & unrealized investment
valuation (416) 78
Total shareholders' equity 105,696 113,793
Total $170,812 $173,188
(Note) Derived from audited financial statements
Contact:
Progress Software Corporation
Liza Beth Hayman 617/280-4697
Margot Carlson Delogne 617/280-4144
hayman@bedford.progress.com |
