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 third
quarter ended August 31, 2014.
Revenue from continuing operations was $79.3 million compared to $77.6
million in the same quarter last year, a year over year increase of 2%
on an actual currency basis, and flat on a constant currency basis.
Additional financial highlights included:
On a GAAP basis in the fiscal third quarter of 2014:
-
Income from operations was $19.4 million compared to $9.7 million in
the same quarter last year;
-
Income from continuing operations was $11.1 million compared to $7.2
million in the same quarter last year;
-
Net income was $11.1 million compared to $24.8 million in the same
quarter last year; and
-
Diluted earnings per share from continuing operations was $0.22
compared to $0.13 in the same quarter last year.
On a non-GAAP basis in the fiscal third quarter of 2014:
-
Income from operations was $29.6 million compared to $21.4 million in
the same quarter last year;
-
Operating margin was 37% compared to 28% in the same quarter last year;
-
Income from continuing operations was $20.0 million compared to $14.7
million in the same quarter last year; and
-
Diluted earnings per share from continuing operations was $0.39
compared to $0.27 in the same quarter last year.
Phil Pead, CEO at Progress, said, “We are pleased with our results for
our third quarter. Our OpenEdge revenue growth and the continued
momentum with our Pacific Platform reinforce the value that our
technologies deliver to customers and partners. With another solid
quarter, and the increased focus from our newly-created business units,
Progress remains well positioned to achieve our goal of becoming the
preferred destination for application developers.”
Other fiscal third quarter 2014 metrics and recent results included:
-
Cash, cash equivalents and short-term investments were $261.3 million;
-
Cash inflows from operations were $25.9 million compared to cash
outflows from operations of $1.9 million in the same quarter in fiscal
year 2013;
-
DSO was 66 days, compared to 65 days in the fiscal second 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 2.3 million shares for $52.6 million as of August 31, 2014.
In addition, during the third quarter of fiscal year 2014, Progress
announced that it is making strategic changes to its organization to
provide greater focus and agility in the delivery of next generation
application development, deployment and integration solutions.
Effective September 1, 2014, Progress began operating as three distinct
business units: OpenEdge, Application Development and Deployment, and
Data Connectivity and Integration, each with dedicated sales, product
management and product marketing functions. These changes are designed
to enable the business to better deliver against the fast paced
requirements in the on-premise and cloud application development and
data connectivity and integration markets.
Business Outlook
Progress Software provides the following guidance for the fiscal year
ending November 30, 2014:
-
Revenue is expected to be between $331 million and $335 million;
-
Non-GAAP earnings per share is expected to be between $1.47 and $1.50;
-
Non-GAAP operating margin is expected to be approximately 34%;
-
Free cash flow is expected to be between $79 million and $81 million;
and
-
Non-GAAP effective tax rate is expected to be between 32% and 33%.
Progress Software provides the following guidance for the fourth fiscal
quarter ending November 30, 2014:
-
Revenue is expected to be between $96 million and $100 million; and
-
Non-GAAP earnings per share is expected to be between $0.44 and $0.47.
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 third quarter of 2014 will be broadcast live at 5:00 p.m. ET on
Thursday, September 25, 2014 and can be accessed on the investor
relations section of the company’s website, located at www.progress.com.
Additionally, you can listen to the call by telephone by dialing
1-888-395-3227, pass code 2611858. 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 company's performance to that of prior
periods for analysis of trends and for budget and planning purposes. A
reconciliation of non-GAAP adjustments to the company's GAAP financial
results is included in the tables below. Additional information
regarding the company's non-GAAP financial information is contained in
the company's 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 of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Progress has identified some of these forward-looking
statements with words like “believe,” “may,” “could,” “would,” “might,”
“should,”“expect,” “intend,” “plan,” “target,” “anticipate” and
“continue,” the negative of these words, other terms of similar meaning
or the use of future dates.
Forward-looking statements in this press release include, but are not
limited to, statements regarding Progress's strategic plan; future
revenue growth, operating margin and cost savings; product development,
strategic partnering and marketing initiatives; the growth rates of
certain markets; and other statements regarding the future operation,
direction and success of Progress's business. There are a number of
factors that could cause actual results or future events to differ
materially from those anticipated by the forward-looking statements,
including, without limitation:
(1) Market acceptance of Progress’s strategy and product development
initiatives; (2) pricing pressures and the competitive environment in
the software industry and Platform-as-a-Service market; (3) Progress's
ability to successfully manage transitions to new business models and
markets, including an increased emphasis on a cloud and subscription
strategy; (4) Progress's ability to make acquisitions and to realize the
expected benefits and anticipated synergies from such acquisitions; (5)
the continuing uncertainty in the U.S. and international economies,
which could result in fewer sales of Progress's products and may
otherwise harm Progress's business; (6) business and consumer use of the
Internet and the continuing adoption of Cloud technologies; (7) the
receipt and shipment of new orders; (8) Progress's ability to expand its
relationships with channel partners and to manage the interaction of
channel partners with its direct sales force; (9) the timely release of
enhancements to Progress's products and customer acceptance of new
products; (10) the positioning of Progress's products in its existing
and new markets; (11) variations in the demand for professional services
and technical support; (12) Progress's ability to penetrate
international markets and manage its international operations; and (13)
changes in exchange rates. For further information regarding risks and
uncertainties associated with Progress's business, please refer to
Progress's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
November 30, 2013. Progress undertakes no obligation to update any
forward-looking statements, which speak only as of the date of this
press release.
Progress Software Corporation
Progress
Software Corporation (NASDAQ: PRGS) is a global software company
that simplifies the development, deployment and management of business
applications on-premise or in the cloud, on any platform or device, to
any data source, with enhanced performance, minimal IT complexity and
low total cost of ownership. Progress Software can be reached at www.progress.com
or 1-781-280-4000.
Progress is a trademark or registered trademark of Progress Software
Corporation or one of its subsidiaries or affiliates in the U.S. and
other countries. Any other trademarks contained herein are the property
of their respective owners.
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(In thousands, except per share data)
|
|
August 31,
2014
|
|
August 31,
2013
|
|
% Change
|
|
August 31,
2014
|
|
August 31,
2013
|
|
% Change
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
$
|
26,393
|
|
|
$
|
25,666
|
|
|
3
|
%
|
|
$
|
76,645
|
|
|
$
|
84,920
|
|
|
(10
|
)%
|
|
Maintenance and services
|
|
52,881
|
|
|
51,912
|
|
|
2
|
%
|
|
157,994
|
|
|
158,096
|
|
|
—
|
%
|
|
Total revenue
|
|
79,274
|
|
|
77,578
|
|
|
2
|
%
|
|
234,639
|
|
|
243,016
|
|
|
(3
|
)%
|
|
Costs of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
1,805
|
|
|
1,587
|
|
|
14
|
%
|
|
4,951
|
|
|
5,033
|
|
|
(2
|
)%
|
|
Cost of maintenance and services
|
|
5,222
|
|
|
6,403
|
|
|
(18
|
)%
|
|
16,276
|
|
|
21,043
|
|
|
(23
|
)%
|
|
Amortization of acquired intangibles
|
|
834
|
|
|
529
|
|
|
58
|
%
|
|
1,893
|
|
|
811
|
|
|
133
|
%
|
|
Total costs of revenue
|
|
7,861
|
|
|
8,519
|
|
|
(8
|
)%
|
|
23,120
|
|
|
26,887
|
|
|
(14
|
)%
|
|
Gross profit
|
|
71,413
|
|
|
69,059
|
|
|
3
|
%
|
|
211,519
|
|
|
216,129
|
|
|
(2
|
)%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
22,477
|
|
|
24,554
|
|
|
(8
|
)%
|
|
71,425
|
|
|
79,086
|
|
|
(10
|
)%
|
|
Product development
|
|
14,975
|
|
|
14,615
|
|
|
2
|
%
|
|
45,568
|
|
|
42,908
|
|
|
6
|
%
|
|
General and administrative
|
|
12,162
|
|
|
13,660
|
|
|
(11
|
)%
|
|
35,236
|
|
|
42,390
|
|
|
(17
|
)%
|
|
Amortization of acquired intangibles
|
|
116
|
|
|
211
|
|
|
(45
|
)%
|
|
428
|
|
|
549
|
|
|
(22
|
)%
|
|
Restructuring expenses
|
|
1,680
|
|
|
5,401
|
|
|
(69
|
)%
|
|
2,001
|
|
|
9,127
|
|
|
(78
|
)%
|
|
Acquisition-related expenses
|
|
572
|
|
|
957
|
|
|
(40
|
)%
|
|
3,148
|
|
|
2,229
|
|
|
41
|
%
|
|
Total operating expenses
|
|
51,982
|
|
|
59,398
|
|
|
(12
|
)%
|
|
157,806
|
|
|
176,289
|
|
|
(10
|
)%
|
|
Income from operations
|
|
19,431
|
|
|
9,661
|
|
|
101
|
%
|
|
53,713
|
|
|
39,840
|
|
|
35
|
%
|
|
Other income (expense), net
|
|
(2,457
|
)
|
|
177
|
|
|
(1,488
|
)%
|
|
(2,581
|
)
|
|
(663
|
)
|
|
(289
|
)%
|
|
Income from continuing operations before income taxes
|
|
16,974
|
|
|
9,838
|
|
|
73
|
%
|
|
51,132
|
|
|
39,177
|
|
|
31
|
%
|
|
Provision for income taxes
|
|
5,879
|
|
|
2,634
|
|
|
123
|
%
|
|
16,138
|
|
|
14,018
|
|
|
15
|
%
|
|
Income from continuing operations
|
|
11,095
|
|
|
7,204
|
|
|
54
|
%
|
|
34,994
|
|
|
25,159
|
|
|
39
|
%
|
|
Income (loss) from discontinued operations, net
|
|
—
|
|
|
17,639
|
|
|
(100
|
)%
|
|
—
|
|
|
34,712
|
|
|
(100
|
)%
|
|
Net income
|
|
$
|
11,095
|
|
|
$
|
24,843
|
|
|
(55
|
)%
|
|
$
|
34,994
|
|
|
$
|
59,871
|
|
|
(42
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
69
|
%
|
|
$
|
0.69
|
|
|
$
|
0.45
|
|
|
53
|
%
|
|
Discontinued operations
|
|
—
|
|
|
0.33
|
|
|
(100
|
)%
|
|
—
|
|
|
0.63
|
|
|
(100
|
)%
|
|
Net income per share
|
|
$
|
0.22
|
|
|
$
|
0.46
|
|
|
(52
|
)%
|
|
$
|
0.69
|
|
|
$
|
1.08
|
|
|
(36
|
)%
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
69
|
%
|
|
$
|
0.68
|
|
|
$
|
0.45
|
|
|
51
|
%
|
|
Discontinued operations
|
|
—
|
|
|
0.32
|
|
|
(100
|
)%
|
|
—
|
|
|
0.62
|
|
|
(100
|
)%
|
|
Net income per share
|
|
$
|
0.22
|
|
|
$
|
0.46
|
|
|
(52
|
)%
|
|
$
|
0.68
|
|
|
$
|
1.06
|
|
|
(36
|
)%
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
50,383
|
|
|
53,532
|
|
|
(6
|
)%
|
|
50,975
|
|
|
55,451
|
|
|
(8
|
)%
|
|
Diluted
|
|
50,931
|
|
|
54,389
|
|
|
(6
|
)%
|
|
51,590
|
|
|
56,292
|
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
(In thousands)
|
|
August 31,
2014
|
|
November 30,
2013
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
$
|
261,292
|
|
|
$
|
231,440
|
|
Accounts receivable, net
|
|
57,840
|
|
|
66,784
|
|
Other current assets
|
|
33,550
|
|
|
39,587
|
|
Total current assets
|
|
352,682
|
|
|
337,811
|
|
Property and equipment, net
|
|
59,176
|
|
|
57,030
|
|
Goodwill and intangible assets, net
|
|
245,816
|
|
|
234,236
|
|
Other assets
|
|
18,970
|
|
|
53,110
|
|
Total assets
|
|
$
|
676,644
|
|
|
$
|
682,187
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
55,090
|
|
|
$
|
68,186
|
|
Short-term deferred revenue
|
|
93,086
|
|
|
96,393
|
|
Total current liabilities
|
|
148,176
|
|
|
164,579
|
|
Long-term deferred revenue
|
|
2,193
|
|
|
1,144
|
|
Other long-term liabilities
|
|
1,998
|
|
|
2,810
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
Common stock and additional paid-in capital
|
|
200,681
|
|
|
205,307
|
|
Retained earnings
|
|
323,596
|
|
|
308,347
|
|
Total shareholders’ equity
|
|
524,277
|
|
|
513,654
|
|
Total liabilities and shareholders’ equity
|
|
$
|
676,644
|
|
|
$
|
682,187
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(In thousands)
|
|
August 31,
2014
|
|
August 31,
2013
|
|
August 31,
2014
|
|
August 31,
2013
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
11,095
|
|
|
$
|
24,843
|
|
|
$
|
34,994
|
|
|
$
|
59,871
|
|
|
Depreciation and amortization
|
|
3,938
|
|
|
3,897
|
|
|
10,985
|
|
|
11,374
|
|
|
Stock-based compensation
|
|
6,940
|
|
|
5,573
|
|
|
18,194
|
|
|
16,360
|
|
|
Net gains on sales of dispositions
|
|
—
|
|
|
(35,885
|
)
|
|
—
|
|
|
(70,991
|
)
|
|
Other non-cash adjustments
|
|
1,856
|
|
|
2,648
|
|
|
2,232
|
|
|
447
|
|
|
Changes in operating assets and liabilities
|
|
2,099
|
|
|
(2,937
|
)
|
|
2,064
|
|
|
(30,340
|
)
|
|
Net cash flows from operating activities
|
|
25,928
|
|
|
(1,861
|
)
|
|
68,469
|
|
|
(13,279
|
)
|
|
Capital expenditures
|
|
(2,154
|
)
|
|
(603
|
)
|
|
(10,191
|
)
|
|
(2,989
|
)
|
|
Redemptions and sales of auction-rate-securities
|
|
26,196
|
|
|
—
|
|
|
26,196
|
|
|
25
|
|
|
Issuances of common stock, net of repurchases
|
|
(13,795
|
)
|
|
(47,981
|
)
|
|
(41,890
|
)
|
|
(192,075
|
)
|
|
Payments of acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(12,493
|
)
|
|
(9,450
|
)
|
|
Proceeds from divestitures, net
|
|
—
|
|
|
37,739
|
|
|
3,300
|
|
|
111,120
|
|
|
Other
|
|
(1,459
|
)
|
|
(1,116
|
)
|
|
(3,539
|
)
|
|
(6,587
|
)
|
|
Net change in cash, cash equivalents and short-term investments
|
|
34,716
|
|
|
(13,822
|
)
|
|
29,852
|
|
|
(113,235
|
)
|
|
Cash, cash equivalents and short-term investments, beginning of
period
|
|
226,576
|
|
|
255,804
|
|
|
231,440
|
|
|
355,217
|
|
|
Cash, cash equivalents and short-term investments, end of period
|
|
$
|
261,292
|
|
|
$
|
241,982
|
|
|
$
|
261,292
|
|
|
$
|
241,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION
|
|
|
|
|
|
Revenue from continuing operations by Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Q3 2013
|
|
Q4 2013
|
|
Q1 2014
|
|
Q2 2014
|
|
Q3 2014
|
|
YTD 2014
|
|
YTD 2013
|
|
License
|
|
$
|
25,666
|
|
|
$
|
37,392
|
|
|
$
|
22,264
|
|
|
$
|
27,988
|
|
|
$
|
26,393
|
|
|
$
|
76,645
|
|
|
$
|
84,920
|
|
Maintenance
|
|
49,752
|
|
|
51,230
|
|
|
50,181
|
|
|
50,305
|
|
|
50,746
|
|
|
151,232
|
|
|
151,627
|
|
Professional services
|
|
2,160
|
|
|
2,358
|
|
|
2,093
|
|
|
2,534
|
|
|
2,135
|
|
|
6,762
|
|
|
6,469
|
|
Total revenue
|
|
$
|
77,578
|
|
|
$
|
90,980
|
|
|
$
|
74,538
|
|
|
$
|
80,827
|
|
|
$
|
79,274
|
|
|
$
|
234,639
|
|
|
$
|
243,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from continuing operations by Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Q3 2013
|
|
Q4 2013
|
|
Q1 2014
|
|
Q2 2014
|
|
Q3 2014
|
|
YTD 2014
|
|
YTD 2013
|
|
North America
|
|
$
|
34,596
|
|
|
$
|
42,833
|
|
|
$
|
34,586
|
|
|
$
|
36,827
|
|
|
$
|
35,654
|
|
|
$
|
107,067
|
|
|
$
|
111,445
|
|
EMEA
|
|
32,315
|
|
|
35,256
|
|
|
29,315
|
|
|
33,698
|
|
|
32,995
|
|
|
96,008
|
|
|
98,344
|
|
Latin America
|
|
5,496
|
|
|
6,526
|
|
|
5,108
|
|
|
5,703
|
|
|
5,695
|
|
|
16,506
|
|
|
18,844
|
|
Asia Pacific
|
|
5,171
|
|
|
6,365
|
|
|
5,529
|
|
|
4,599
|
|
|
4,930
|
|
|
15,058
|
|
|
14,383
|
|
Total revenue
|
|
$
|
77,578
|
|
|
$
|
90,980
|
|
|
$
|
74,538
|
|
|
$
|
80,827
|
|
|
$
|
79,274
|
|
|
$
|
234,639
|
|
|
$
|
243,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(In thousands, except per share data)
|
|
August 31,
2014
|
|
August 31,
2013
|
|
August 31,
2014
|
|
August 31,
2013
|
|
GAAP income from operations
|
|
$
|
19,431
|
|
|
$
|
9,661
|
|
|
$
|
53,713
|
|
|
$
|
39,840
|
|
|
GAAP operating margin
|
|
25
|
%
|
|
12
|
%
|
|
23
|
%
|
|
16
|
%
|
|
Amortization of acquired intangibles
|
|
950
|
|
|
740
|
|
|
2,321
|
|
|
1,360
|
|
|
Stock-based compensation (1)
|
|
6,940
|
|
|
4,600
|
|
|
18,194
|
|
|
14,070
|
|
|
Restructuring expenses
|
|
1,680
|
|
|
5,401
|
|
|
2,001
|
|
|
9,127
|
|
|
Acquisition-related expenses
|
|
572
|
|
|
957
|
|
|
3,148
|
|
|
2,229
|
|
|
Total operating adjustments
|
|
10,142
|
|
|
11,698
|
|
|
25,664
|
|
|
26,786
|
|
|
Non-GAAP income from operations
|
|
$
|
29,573
|
|
|
$
|
21,359
|
|
|
$
|
79,377
|
|
|
$
|
66,626
|
|
|
Non-GAAP operating margin
|
|
37
|
%
|
|
28
|
%
|
|
34
|
%
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income from continuing operations
|
|
$
|
11,095
|
|
|
$
|
7,204
|
|
|
$
|
34,994
|
|
|
$
|
25,159
|
|
|
Operating adjustments (from above)
|
|
10,142
|
|
|
11,698
|
|
|
25,664
|
|
|
26,786
|
|
|
Realized loss on sales of auction-rate-securities
|
|
2,554
|
|
|
—
|
|
|
2,554
|
|
|
—
|
|
|
Income tax adjustment
|
|
(3,748
|
)
|
|
(4,230
|
)
|
|
(9,387
|
)
|
|
(8,399
|
)
|
|
Total income from continuing operations adjustments
|
|
8,948
|
|
|
7,468
|
|
|
18,831
|
|
|
18,387
|
|
|
Non-GAAP income from continuing operations
|
|
$
|
20,043
|
|
|
$
|
14,672
|
|
|
$
|
53,825
|
|
|
$
|
43,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share from continuing operations
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
$
|
0.68
|
|
|
$
|
0.45
|
|
|
Income from continuing operations adjustments (from above)
|
|
0.18
|
|
|
0.14
|
|
|
0.37
|
|
|
0.33
|
|
|
Non-GAAP diluted earnings per share from continuing operations
|
|
$
|
0.39
|
|
|
$
|
0.27
|
|
|
$
|
1.04
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
50,931
|
|
|
54,389
|
|
|
51,590
|
|
|
56,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation is included in the GAAP statements of
income, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
141
|
|
|
$
|
133
|
|
|
$
|
439
|
|
|
$
|
500
|
|
|
Sales and marketing
|
|
1,546
|
|
|
748
|
|
|
3,736
|
|
|
2,668
|
|
|
Product development
|
|
1,407
|
|
|
999
|
|
|
4,186
|
|
|
3,687
|
|
|
General and administrative
|
|
3,846
|
|
|
2,720
|
|
|
9,833
|
|
|
7,215
|
|
|
Stock-based compensation from continuing operations
|
|
$
|
6,940
|
|
|
$
|
4,600
|
|
|
$
|
18,194
|
|
|
$
|
14,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(In thousands, except per share data)
|
|
August 31,
2014
|
|
August 31,
2013
|
|
August 31,
2014
|
|
August 31,
2013
|
|
GAAP costs of revenue
|
|
$
|
7,861
|
|
|
$
|
8,519
|
|
|
$
|
23,120
|
|
|
$
|
26,887
|
|
GAAP operating expenses
|
|
51,982
|
|
|
59,398
|
|
|
157,806
|
|
|
176,289
|
|
GAAP expenses
|
|
59,843
|
|
|
67,917
|
|
|
180,926
|
|
|
203,176
|
|
Operating adjustments (from above)
|
|
10,142
|
|
|
11,698
|
|
|
25,664
|
|
|
26,786
|
|
Non-GAAP expenses
|
|
$
|
49,701
|
|
|
$
|
56,219
|
|
|
$
|
155,262
|
|
|
$
|
176,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR
FISCAL YEAR 2014 GUIDANCE
|
|
(Unaudited)
|
|
|
|
|
|
Fiscal Year 2014 Revenue Growth Guidance
|
|
|
|
|
|
Fiscal Year Ended
|
|
Fiscal Year Ending
|
|
|
|
November 30, 2013
|
|
November 30, 2014
|
|
(In millions)
|
|
|
|
Low
|
|
% Change
|
|
High
|
|
% Change
|
|
Total revenue
|
|
$334
|
|
$331
|
|
(1)%
|
|
$335
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014 Non-GAAP Operating Margin Guidance
|
|
|
|
Fiscal Year Ending November 30, 2014
|
|
(In millions)
|
|
Low
|
|
High
|
|
GAAP income from operations
|
|
$
|
77.4
|
|
|
$
|
78.8
|
|
|
GAAP operating margins
|
|
23
|
%
|
|
24
|
%
|
|
Restructuring expense
|
|
2.5
|
|
|
2.5
|
|
|
Stock-based compensation
|
|
23.3
|
|
|
23.3
|
|
|
Acquisition related expense
|
|
3.5
|
|
|
3.5
|
|
|
Amortization of intangibles
|
|
3.2
|
|
|
3.2
|
|
|
Realized loss on sale of auction rate securities
|
|
2.6
|
|
|
2.6
|
|
|
Total operating adjustments
|
|
35.1
|
|
|
35.1
|
|
|
Non-GAAP income from operations
|
|
$
|
112.5
|
|
|
$
|
113.9
|
|
|
Non-GAAP operating margin
|
|
34
|
%
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014 Non-GAAP Earnings per Share and Effective Tax
Rate Guidance
|
|
|
|
Fiscal Year Ending November 30, 2014
|
|
(In millions, except per share data)
|
|
Low
|
|
High
|
|
GAAP net income
|
|
$
|
51.2
|
|
|
$
|
51.3
|
|
|
Operating adjustments (from above)
|
|
35.1
|
|
|
35.1
|
|
|
Income tax adjustment (2)
|
|
(9.8
|
)
|
|
(10.1
|
)
|
|
Non-GAAP net income
|
|
$
|
76.5
|
|
|
$
|
76.3
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share
|
|
$
|
0.98
|
|
|
$
|
1.01
|
|
|
Non-GAAP diluted earnings per share
|
|
$
|
1.47
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
52.0
|
|
|
51.0
|
|
|
|
|
|
|
|
|
|
|
(2) Tax adjustment is based on a non-GAAP effective tax rate of 32%
for Low and 33% for High, calculated as follows:
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
112.5
|
|
|
$
|
113.9
|
|
|
Non-GAAP net income
|
|
76.5
|
|
|
76.3
|
|
|
Tax provision
|
|
36.0
|
|
|
37.6
|
|
|
Non-GAAP tax rate
|
|
32
|
%
|
|
33
|
%
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q4
2014 GUIDANCE
|
|
(Unaudited)
|
|
|
|
|
|
Q4 2014 Revenue Growth Guidance
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ending
|
|
|
|
November 30, 2013
|
|
November 30, 2014
|
|
(In millions)
|
|
|
|
Low
|
|
% Change
|
|
High
|
|
% Change
|
|
Total revenue
|
|
$91
|
|
$96
|
|
6%
|
|
$100
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2014 Non-GAAP Earnings per Share Guidance
|
|
|
|
Three Months Ending November 30, 2014
|
|
|
|
Low
|
|
High
|
|
GAAP diluted earnings per share
|
|
$
|
0.31
|
|
|
$
|
0.34
|
|
|
Restructuring expense
|
|
0.01
|
|
|
0.01
|
|
|
Stock-based compensation
|
|
0.10
|
|
|
0.10
|
|
|
Acquisition related expense
|
|
0.01
|
|
|
0.01
|
|
|
Amortization of intangibles
|
|
0.02
|
|
|
0.02
|
|
|
Total operating adjustments
|
|
0.14
|
|
|
0.14
|
|
|
Income tax adjustment
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
Non-GAAP diluted earnings per share
|
|
$
|
0.44
|
|
|
$
|
0.47
|
|
Copyright Business Wire 2014