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--Company and Board Remain Focused on Continued Execution of Strategic Plan
Progress Software Corporation (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 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.
Progress Software Corporation
Progress Software Corporation (PRGS) is a global software
company that simplifies the development, deployment and management of
business applications on-premise or on any Cloud, on any platform and on
any device with minimal IT complexity and low total cost of ownership.
Progress Software can be reached at www.progress.com
or 1-781-280-4000.
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 and the expected timing for completion; the components of
that plan including operational restructuring, product divestitures and
return of capital to shareholders; future revenue growth, operating
margin, expense run rate and other cost savings; Progress’s cash flow
position and maintenance renewal rates; 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)
disruption caused by the CEO transition on Progress’s business,
implementation of its strategic plan and operating results; (2)
Progress’s ability to realize the expected benefits and cost savings
from its strategic plan; (3) market acceptance of Progress’s strategic
plan and product development initiatives; (4) disruption caused by the
implementation of the strategic plan and related restructuring and
divestitures on relationships with employees, customers, ISVs, other
channel partners, vendors and other business partners; (5) Progress’s
ability to complete the proposed product divestitures in a timely
manner, at favorable prices or at all; (6) market conditions, timing
constraints and other factors that could impact Progress’s ability to
complete the proposed share repurchases in fiscal 2013 or at all; (7)
the accuracy of Progress’s methodology for allocating non-dedicated
costs and expenses (including general and administrative expenses) to
its core and non-core segments; (8) pricing pressures and the
competitive environment in the software industry and
Platform-as-a-Service market; (9) Progress’s ability to make technology
acquisitions and to realize the expected benefits and anticipated
synergies from such acquisitions; (10) the continuing weakness in the
U.S. and international economies, which could result in fewer sales of
Progress’s products and/or delays in the implementation of Progress’s
strategic plan and may otherwise harm Progress’s business; (11) business
and consumer use of the Internet and the continuing adoption of Cloud
technologies; (12) the receipt and shipment of new orders and changes in
maintenance renewal rates; (13) Progress’s ability to expand its
relationships with channel partners and to manage the interaction of
channel partners with its direct sales force; (14) the timely release of
enhancements to Progress’s products and customer acceptance of new
products; (15) the positioning of Progress’s products in its existing
and new markets; (16) variations in the demand for professional services
and technical support; (17) Progress’s ability to penetrate
international markets and manage its international operations; and (18)
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, 2011, as amended, and Quarterly Reports on Form 10-Q.
Progress undertakes no obligation to update any forward-looking
statements, which speak only as of the date of this press release.
SOURCE: Progress Software Corporation
Investor Relations / Media:
Progress Software Corporation
Tom Barth, 781-280-4135
tobarth@progress.com
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