Baan reports $US19m loss for Q1
- 29 April, 1999 12:01
In a terse earnings report yesterday, Baan reported a loss of $US19 million or 9 cents per diluted share for the first quarter ended March 31.
That compares to net income of $2 million, or 1 cent per diluted share, in the first quarter of 1998, Baan officials said.
Revenues also fell 1.6 per cent over the year-ago first quarter, from $179 million to $176 million.
Baan spokesman Ronald Florisson, reached at the company's headquarters in Barneveld, the Netherlands, said the company had no further comment on or explanation for the losses.
The numbers make clear, however, that the drop-off in the enterprise resource planning vendor's revenues stems from the company's decreasing licence revenues. They fell roughly 30 per cent from $92.9 million in the first quarter of 1998, to $65.2 million in the quarter just ended.
Another factor is the amount of revenues which Baan is now deferring. Baan's deferred revenues totalling $163 million in the first quarter of 1999, the company said, which is roughly the same level as at the end of 1998. The Dutch-American software vendor adopted a more conservative approach to accounting for its revenues over the past year, which has pushed its results down.
Baan has been able to increase its maintenance and services revenues, however. They rose 28 per cent in the first quarter to $111 million, compared to $86.5 million in last year's first quarter. They also make up a greater proportion of overall revenues than in the past, Baan officials said.
Baan also recorded 600 licence transactions in the first quarter, which it said is a record number of transactions for the company, and a 75 perccent increase over the previous year.
The software vendor also met its cost-cutting goals -- part of the company's overall restructuring -- in the first quarter. Operating expense and cost of revenues have fallen by about 20 per cent to $202 million, compared to the third quarter of 1998, before the company restructuring started, Baan officials said. The company also is working with banks to increase its line of credit by $75 million, officials said. By region, revenues were flat year on year in Europe, the Middle East and Africa, according to Florisson. In North America, he said, revenues fell 3 per cent to $75.6 million, and in Asia-Pacfic, revenues fell 10 per cent over the first quarter of 1998 to total $14.2 million, he said.
In its statement, Baan did not make any predictions for future earnings and revenues. But the company's strategy is to increase its revenue from services, which will help provide "a more predictable and sustainable revenue source" for the software vendor, Baan said.