UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Progress Software Corporation

Commission file number: 0-19417

Massachusetts		04-2746201
(State or other jurisdiction of		(I.R.S. employer
incorporation or organization)		identification no.)

14 Oak Park
Bedford, Massachusetts 01730
(Address of principal executive offices, including zip code)

(781) 280-4000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition.

As described in more detail under Item 2.05 below, on June 10, 2010, Progress Software Corporation (the “Company”) issued a press release announcing a further series of strategic initiatives to better position the Company for long-term growth, improved profitability, greater competitiveness and improved efficiency. In this press release, the Company also stated that it expects to achieve or exceed its earnings per share guidance and be slightly below its revenue guidance for its second fiscal quarter ended May 31, 2010. A copy of this press release is furnished as Exhibit 99.1 to this report. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date of this report, regardless of any general incorporation language in the filing.

Item 2.05. Costs Associated with Exit or Disposal Activities.

On June 10, 2010, the Company announced a further series of strategic initiatives to better position the Company for long-term growth, improved profitability, greater competitiveness and improved efficiency. To execute these initiatives, the Company announced that it is restructuring its product organization as well as other functions to better optimize operations and to improve productivity and efficiency. As a result, the Company expects to reduce its global workforce by approximately 140 to 160 positions, which is approximately 7 to 9 percent of its global workforce. The Company expects to complete most of these workforce reductions during its third fiscal quarter ending August 31, 2010, depending upon local legal requirements. These workforce reductions will occur in substantially all functional units and across all geographies in which the Company operates. The Company also expects to consolidate offices in various locations.

As a result of these workforce reductions and office consolidations, the Company currently expects to incur in the aggregate a pre-tax charge in the range of approximately $11 million to $16 million. The estimated aggregate charge consists of approximately $8 million to $12 million relating to the Company’s global workforce reduction, consisting primarily of severance and post-employment benefits, and approximately $3 million to $4 million relating to its office consolidations. The Company currently expects to record this charge primarily in its 2010 third fiscal quarter. Substantially all of this charge will result in cash expenditures.

The Company also announced that these strategic initiatives will include the global consolidation and redeployment of a portion of the Company’s product development and administrative personnel, assets and processes to India and/or potentially other global locations that offer greater efficiencies to the business. In connection with these initiatives, the Company expects to incur future pre-tax restructuring charges of between approximately $9 million to $13 million during the fourth quarter of 2010 and the full 2011 fiscal year, primarily comprising costs for severance and consolidation of facilities. Additionally, the Company expects to incur additional non-recurring, pre-tax transition costs of approximately $8 million to $13 million over the next eighteen month period commencing with the Company’s 2010 third fiscal quarter. These investments are necessary to ramp up the new, more efficient capabilities ahead of switching over from the existing cost structure. The Company will break out these restructuring charges and transition expenses in its financial results as they are incurred during the phase-in period. Substantially all of these charges will result in cash expenditures.

Except for the historical information and discussions contained herein, statements contained in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which include statements regarding the Company’s business outlook for its second fiscal quarter, strategic plans and the actions and estimated charges and anticipated timing described above, involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including but not limited to the following: the receipt and shipment of new orders; the timely release of enhancements to the Company’s products; the growth rates of certain market segments; the positioning of the Company’s products in those market segments; variations in the demand for professional services and technical support; pricing pressures and the competitive environment in the software industry; the continuing weakness in the U.S. and international economies, which could result in fewer sales of the Company’s products and may otherwise harm the Company’s business; business and consumer use of the Internet; the Company’s ability to complete and integrate acquisitions; the Company’s ability to realize the expected benefits and anticipated synergies from acquired businesses; the

Company’s ability to penetrate international markets and manage its international operations; changes in exchange rates; the Company’s ability to realize the expected benefits from the actions described in this report; and the potential disruption to the Company’s business from the actions described in this report. The Company undertakes no obligation to update information contained in this report. For further information regarding risks and uncertainties associated with the Company’s business, please refer to the Company’s other filings with the Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.		Description
99.1*		Press release issued by Progress Software Corporation, dated June 10, 2010

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.