Baan Company NV, the Dutch ERP vendor, has reported a net first quarter loss of $19m, down from a profit of $2.1m on revenue 2% lower at $175.7m. The losses were the equivalent of $0.09 a share, compared with the $0.11 that analysts had been expecting. Baan says that it has no problem getting new business and boasts that it increased the number of license transactions in the quarter by 75% to 600. But selling cut-price seats to small and mid-sized companies will do little for its problems in the short-term, and total license revenue in the quarter was down 29.8% to $65.1m. In common with its rival SAP AG, maintenance and service revenues are now the most important side of the business. Revenue in this area rose 27.7% to $110.5m.
Losses and a huge restructuring operation have shrunk cash balances by $80m over the first three months and they now stand at $125.3m. Baan is talking to a consortium of banks to increase its line of credit from $20m to $75m. The stock market pushed the shares 11.4% higher at $9.75.
Meantime, Baan has denied widespread reports that it is to sell off its Coda accounting subsidiary. As the company reported better than expected first quarter figures, an official insisted that it needs Coda for its latest product line. Former CFO Klaas Wagenaar, now executive VP for operational and strategic initiatives, has been given the task of integrating Coda into the Baan organization.
With a new management team looking at ways to turn round the ailing company, Coda was expected to be sold off to another organization or be the subjected of a separate IPO. Baan paid $86.6m for UK-based Coda in February 1998 (CI No 3,354) in a bid improve its standalone position in the financial marketplace and improve the capabilities of its ERP offering. But rumors have grown in recent months that Baan was unhappy with its purchase and that Coda’s software was insufficiently scalable for its needs.
