Progress Software Corp (NASDAQ: PRGS) stock fell over 9.3% on Jan 15th, 2021 (as of 1:17 pm GMT-5; Source: Google finance) after the company lower than expected guidance. For fiscal 2021, Chef’s business is expected to grow in low single digits. The company expects the integration of Chef to continue throughout 2021. As a result, the company projects to recognize cost synergies gradually throughout the year and to exit the year with an operating margin contribution from Chef of at least 35%.
DSO for the fourth quarter was 54 days compared to 56 days in the fiscal fourth quarter of 2019. Deferred revenue was a $193 million at the end of the fourth quarter, which is up almost $16 million from a year-ago, reflecting the addition of Chef’s deferred revenue after purchase accounting adjustments. Adjusted free cash flow was $40.7 million for the fourth quarter, up 11% compared to the year-ago quarter. And during the quarter, the company repurchased $40 million of Progress stock. As a result, at the end of Q4, the company had a $190 million remaining under the current share repurchase authorization. The company ended the fourth quarter with a $106 million in cash, cash equivalents and short-term investments and a debt balance of $384.5 million, which is comprised of the term loan in the amount of $286 million and $98.5 million under the revolving line of credit, which the company drew down to partially fund the Chef acquisition.
PRGS in the fourth quarter of FY 20 has reported the adjusted earnings per share of 91 cents, beating the analysts’ estimates for the adjusted earnings per share of 77 cents. The company had reported the adjusted revenue growth of 5 percent to $129.1 million in the fourth quarter of FY 20, reflects stronger than anticipated sales of the OpenEdge and DCI products. Despite closing the Chef acquisition five days later than anticipated, the company were still able to deliver these very strong results on the top line and the operating discipline through the COVID-19 pandemic resulted in continued margin expansion. Operating income for the fourth quarter was $48.1 million and operating margin of 37% compared to $47.3 million in the year-ago quarter.
For the first quarter of FY 20, the company expects EPS to be in the range of $0.72 – $0.76 Next quarter revenue is expected to be in the range $119 – $123 Mln