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

Q3 2006

Change

Sales

$121.8

$111.4

9.4%

Net Profit

$13.0

$8.9

47.1%

EPS

$0.30

$0.21

42.9%

Diluted Shares

44.2

42.9

2.9%

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

82.3%

82.6%

(0.3)

Operating Margin

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

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$307

$237

29.5%

Accounts Rec.

$76.1

$67.2

13.2%

Liabilities

Q3 2007

Q3 2006

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.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.