Progress Evolves: Fool by Numbers
By
Anders Bylund (TMFZahrim)
September 21, 2007
|
On Sept. 20, Progress Software (Nasdaq: PRGS) released third-quarter earnings for the period ended Aug. 31. Let's run the numbers to see how the maker of business management software fared.
- Earnings per share were nearly 43% better than in the year-ago quarter, despite a mild case of dilutitis? I'd take it, especially because the cash flow figures look even better.
- It appears that Progress has paid off almost all of its debt and strengthened its cash balance, making for a squeaky-clean balance sheet.
- This company reminds me of Tibco Software (Nasdaq: TIBX): award-winning middleware products with a market cap of less than $1.5 billion, with plenty of growth behind it and even more ahead.
- And if you thought Tibco was obscure, Progress takes the prize for toiling away in anonymity -- Progress has one-third the average trading volume of Tibco, one-third as many analysts, and one-eighth as many CAPS ratings. But it's a five-star stock versus Tibco's three. It feels like Progress deserves some more love buzz, folks. Click on over to CAPS and pitch in right away.
(Figures are in millions, except per-share data.)
Income Statement Highlights
|
Q3 2007
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Q3 2006
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Change
|
|
Sales
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$121.8
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$111.4
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9.4%
|
|
Net Profit
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$13.0
|
$8.9
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47.1%
|
|
EPS
|
$0.30
|
$0.21
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42.9%
|
|
Diluted Shares
|
44.2
|
42.9
|
2.9%
|
Get back to basics with the income statement.
Margin Checkup
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Q3 2007
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Q3 2006
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Change*
|
|
Gross Margin
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82.3%
|
82.6%
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(0.3)
|
|
Operating Margin
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14.6%
|
11.0%
|
3.7
|
|
Net Margin
|
10.7%
|
8.0%
|
2.7
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q3 2007
|
Q3 2006
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Change
|
|
Cash + ST Invest.
|
$307
|
$237
|
29.5%
|
|
Accounts Rec.
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$76.1
|
$67.2
|
13.2%
|
|
Liabilities
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Q3 2007
|
Q3 2006
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Change
|
|
Current Liabilities
|
$79.8
|
$76.0
|
5.0%
|
|
Long-Term Debt
|
$0.0
|
$1.7
|
N/A
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q3 2007
|
Q3 2006
|
Change
|
|
Cash From Ops.
|
$34.8
|
$15.7
|
121.1%
|
|
Capital Expenditures
|
$5.0
|
$3.1
|
59.1%
|
|
Free Cash Flow
|
$29.8
|
$12.6
|
136.6%
|
Free cash flow is a Fool's best friend.
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