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Progress Software Reports Fourth Quarter Results; Revenue, Operating Income and EPS All Show Double Digit Increases

BEDFORD, Mass.--Dec. 20, 2005--Progress Software Corporation (Nasdaq:
PRGS), a global supplier of application infrastructure software used to
develop, deploy, integrate and manage business applications, today
announced results for its fourth quarter ended November 30, 2005.
Revenue for the quarter was a record $108.0 million, up 12 percent (13
percent at constant currency) from $96.2 million in the fourth quarter
of fiscal 2004. Software license revenue increased 20 percent (same
percent at constant currency) to $44.1 million from $36.8 million in the
same quarter last year.

On a generally accepted accounting principles (GAAP) basis, operating
income increased 21 percent to $19.2 million from $15.9 million in the
fourth quarter of fiscal 2004. Net income increased 29 percent to $14.0
million from $10.9 million in the same quarter last year. Diluted
earnings per share increased 18 percent to 33 cents from 28 cents in the
fourth quarter of fiscal 2004.

On a pro forma basis, operating income increased 27 percent to $22.6
million from $17.7 million in the fourth quarter of fiscal 2004. Pro
forma net income increased 34 percent to $16.3 million from $12.1
million in the same quarter last year. Pro forma diluted earnings per
share increased 23 percent to 38 cents from 31 cents in the fourth
quarter of fiscal 2004.

The pro forma results in the fourth quarter of fiscal 2005 exclude
after-tax charges for amortization of acquired intangibles of $1.7
million, certain other acquisition-related expenses for retention
bonuses for key employees of acquired companies of $0.4 million and
stock-based compensation related to issuance of restricted stock of $0.1
million. The pro forma results in the fourth quarter of fiscal 2004
exclude an after-tax charge for amortization of acquired intangibles of
$1.3 million.

For the 12 months ended November 30, 2005, revenue increased 12 percent
(10 percent at constant currency) to $405 million from $363 million in
fiscal 2004. On a GAAP basis, operating income increased 38 percent to
$63.8 million from $46.4 million in fiscal 2004. Net income increased 52
percent to $48.9 million from $32.1 million in fiscal 2004 and diluted
earnings per share increased 44 percent to $1.18 from 82 cents in fiscal
2004.

On a pro forma basis, operating income increased 42 percent to $79.5
million from $56.0 million in fiscal 2004. Pro forma net income
increased 44 percent to $55.8 million from $38.7 million in fiscal 2004.
Pro forma diluted earnings per share increased 35 percent to $1.34 from
99 cents in fiscal 2004.

The pro forma results in fiscal 2005 exclude after-tax charges for
amortization of acquired intangibles of $6.3 million, certain other
acquisition-related expenses of $2.3 million, compensation expense from
repurchase of subsidiary stock of $1.9 million, stock-based compensation
of $0.1 million and a tax benefit of $3.8 million. The pro forma results
in fiscal 2004 exclude after-tax charges for amortization of acquired
intangibles of $4.8 million and certain other acquisition-related
expenses of $1.8 million.

The company's cash and short-term investments at the end of the quarter
totaled $266 million. During the fourth quarter, the company purchased
81,000 shares of its stock at a cost of $2.4 million. The company's
existing repurchase authorization, under which approximately 9.9 million
shares remain available for repurchase, expires on September 30, 2006.

"All Progress product lines contributed to a successful fourth quarter
and a record 2005 fiscal year. Our newer operating units - Sonic
Software, Proress Real Time and DataDirect Technologies - delivered
excellent revenue growth of 33 percent in fiscal 2005 and now account
for 36 percent of our software license revenue," stated Joseph Alsop,
co-founder and chief executive officer of PSC. "Revenue from the
OpenEdge Division continues to grow and deliver very substantial
profitability. We are also pleased to have Neon Systems join us, per the
companion press release."