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Progress Software Q4 Loss Widens, COO Jerry Rulli To Step Down; To Cut Jobs

Progress Software Corp. (PRGS) reported that its net loss for the fourth-quarter widened to $73.8 million or $1.52 per share from last year's $9.5 million or $0.19 per share, reflecting an impairment charge. it also announced that Jerry Rulli, Chief Operating Officer, will be leaving the company at the end of the fiscal first quarter of 2017.

In addition, Progress intends to reduce headcount by approximately 450 employees, totaling over 20% of the Company's workforce.

Progress recorded a non-cash impairment charge of $92.0 million, or a diluted loss per share of $1.89 in the latest-quarter, as a result of reduced future growth expectations within its Application Development & Deployment segment related to the Telerik business.

Loss from operations was $62.4 million compared to income from operations of $20.1 million in the same quarter last year.

On a non-GAAP basis, earnings per share was $0.62 compared to $0.53 in the same quarter last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share. Analysts' estimates typically exclude special items.
Revenue was $117.7 million during the quarter compared to $112.7 million in the same quarter last year, a year over year increase of 4% on an actual currency basis and 5% on a constant currency basis.

On a non-GAAP basis, revenue was $118.0 million compared to $115.4 million in the same quarter last year, an increase of 2% on an actual currency basis and 3% on a constant currency basis. Wall Street expected revenues of $123.51 million.

Progress said it will discontinue its investment in its Digital Factory offering and will re-align its resources consistent with its core operating approach. To that end, Progress will implement restructuring efforts that will include consolidating facilities, implementing a simplified organizational structure and reducing marketing and other external expenses.

In addition, Progress intends to reduce headcount by approximately 450 employees, totaling over 20% of the Company's workforce. Initial headcount reductions will begin in the fiscal first quarter of 2017 and should be substantially completed by the end of the fiscal second quarter of 2017, subject to local laws and consultation processes. After investments in our new product strategy, Progress expects to reduce net annual run-rate costs by approximately $20 million by the end of fiscal year 2017.

Looking ahead for the the first-quarter, the company expects loss per share to be $0.06 - $0.12, non-GAAP earnings per share of $0.25 - $0.27, and revenue of $86 million- $89 million. Analysts expects the company to report earnings of $0.31 per share and revenues of $93.22 million for the first-quarter.

For 2017, the company projects earnings per share to be in the range of $0.56 - $0.64, non-GAAP earnings per share of $1.64 - $1.69, GAAP revenue of $387 million - $395 million, and Non-GAAP revenue of $388 million - $396 million. Wall Street currently is looking for fiscal year 2017 earnings of $1.66 per share on annual revenues of $425.08 million.

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