SEC Comment Letter for PROGRESS SOFTWARE (PRGS) — Mar 22, 2007
PROGRESS SOFTWARE CORP /MA
Date: March 22, 2007 · CIK: 0000876167 · Accession: 0000000000-07-014587
AI Filing Summary & Sentiment
File numbers found in text: 000-19417
Letter
March 21, 2007 Room 4561 Mr. Joseph W. Alsop Chief Executive Officer Progress Software Corporation 14 Oak Park Bedford, MA 01730
Re: Progress Software Corporation Form 10-K for Fiscal Year Ended November 30, 2006 Filed February 13, 2007 File No. 000-19417
Dear Mr. Alsop:
We have reviewed the above referenced filing and have the following comments. Please note that we have limited our review to the matters addr essed in the comments below. Where indicated, we think you shoul d revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. After reviewing this inform ation, we may or may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the Year Ended November 30, 2006
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of Operations
Fiscal 2005 Compared to Fiscal 2004, page 20 1. We note that you attribute your 2005 revenue growth to “increased volume of software licenses and maintenance sales for all of [y]our major product lines.” Please tell us the extent that you use volume metrics to manage your business and how you believe such metrics contribut e to understanding and evaluating your company. In addition, tell us how you considered whether disclosure of such metrics is required as explained in Sec tion III.B.1 of SEC Release No. 33-8350.
Mr. Joseph W. Alsop Progress Software Corporation March 21, 2007 Page 2 Liquidity and Capital Resources, page 25 2. We note that your disclosures regarding the changes in your operating cash flows appear to be limited to a brief discussion of accounts receivable and a table summarizing information taken directly from your statements of cash flows. Please explain to us why you believe that these disclosures provide a sufficient basis for readers to analyze the changes in your operating cash flows. Refer to Section IV.B.1 of SE C Release No. 33-8350.
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 1: Nature of Business and Summ ary of Significant Accounting Policies
Revenue Recognition, page 33
3. We that you use the proportional perfor mance method when payment of software license fees is dependent upon the perfor mance of consulting services or the consulting services are esse ntial to the functionality of the licensed software. Please tell us how this policy complies with paragraphs 74 and 75 of SOP 97-2. Specifically, explain why you are using pr oportional performance rather than the percentage-of-completion or completed contract methods.
* * * * * * *
As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provid e us with a response. Please submit all correspondence and supplemental materials on EDGAR as required by Rule 101 of Regulation S-T. You may wish to provide us with marked copies of any amendment to expedite our review. Please furnish a cove r letter with any amendment that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing any amendment and your responses to our comments.
We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an info rmed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
Mr. Joseph W. Alsop Progress Software Corporation March 21, 2007 Page 3 the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
You may contact David Edga r, Staff Accountant, at (202) 551-3459, or me at (202) 551-3451 if you have any questi ons regarding these comments.
Sincerely,
Mark Kronforst
Assistant Chief Accountant
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March 21, 2007 Room 4561 Mr. Joseph W. Alsop Chief Executive Officer Progress Software Corporation 14 Oak Park Bedford, MA 01730 Re: Progress Software Corporation Form 10-K for Fiscal Year Ended November 30, 2006 Filed February 13, 2007 File No. 000-19417 Dear Mr. Alsop: We have reviewed the above referenced filing and have the following comments. Please note that we have limited our review to the matters addr essed in the comments below. Where indicated, we think you shoul d revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. After reviewing this inform ation, we may or may not raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. Form 10-K for the Year Ended November 30, 2006 Item 7. Management’s Discussion and Analys is of Financial Condition and Results of Operations Fiscal 2005 Compared to Fiscal 2004, page 20 1. We note that you attribute your 2005 revenue growth to “increased volume of software licenses and maintenance sales for all of [y]our major product lines.” Please tell us the extent that you use volume metrics to manage your business and how you believe such metrics contribut e to understanding and evaluating your company. In addition, tell us how you considered whether disclosure of such metrics is required as explained in Sec tion III.B.1 of SEC Release No. 33-8350. Mr. Joseph W. Alsop Progress Software Corporation March 21, 2007 Page 2 Liquidity and Capital Resources, page 25 2. We note that your disclosures regarding the changes in your operating cash flows appear to be limited to a brief discussion of accounts receivable and a table summarizing information taken directly from your statements of cash flows. Please explain to us why you believe that these disclosures provide a sufficient basis for readers to analyze the changes in your operating cash flows. Refer to Section IV.B.1 of SE C Release No. 33-8350. Consolidated Financial Statements Notes to Consolidated Financial Statements Note 1: Nature of Business and Summ ary of Significant Accounting Policies Revenue Recognition, page 33 3. We that you use the proportional perfor mance method when payment of software license fees is dependent upon the perfor mance of consulting services or the consulting services are esse ntial to the functionality of the licensed software. Please tell us how this policy complies with paragraphs 74 and 75 of SOP 97-2. Specifically, explain why you are using pr oportional performance rather than the percentage-of-completion or completed contract methods. * * * * * * * As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provid e us with a response. Please submit all correspondence and supplemental materials on EDGAR as required by Rule 101 of Regulation S-T. You may wish to provide us with marked copies of any amendment to expedite our review. Please furnish a cove r letter with any amendment that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing any amendment and your responses to our comments. We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all information investors require for an info rmed decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: Mr. Joseph W. Alsop Progress Software Corporation March 21, 2007 Page 3 the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact David Edga r, Staff Accountant, at (202) 551-3459, or me at (202) 551-3451 if you have any questi ons regarding these comments. Sincerely, Mark Kronforst Assistant Chief Accountant