Baan Company NV, like its rivals in the ERP market, SAP AG and Peoplesoft Inc, has also turned in some quite staggering growth figures for its latest quarter. The Dutch supplier of business management software, which also has headquarters in California, saw third quarter net profits to September 30 up 94.0% at $18.3m on revenue up 65.0% at $173.2m. The company finalized its $250m all share merger with Aurum Software Corp in the quarter, hence the figures for 1996 and 97 have been adjusted to include Aurum’s numbers. Commenting on the quarter, Baan’s founder and CEO Jan Baan said, Since our IPO ten quarters ago, we have quadrupled revenues and realized a nearly tenfold increase in profitability. The company now has over 1,000 product developers and 9,000 implementation consultants on its books. Days sales outstanding dropped 14% to 115 days helping to boost net cash by $50m to a quarter end total of $301m. Baan now has half of its total asset value held in cash and short term investments. Other good news in the period saw the company receive an enormous slice off its tax bill. The Dutch government has passed new legislation under which Baan qualifies for a reduced tax rate of 32% down from a current average rate of 39%. The change, backdated to the beginning of the year, has given Baan an immediate net earnings lift of $3.3m or $0.03 per share, all taken in the third quarter. This was offset by a provision of $9.6m for the future restructuring of Aurum Software, reducing earnings by $0.06. Watch carefully as this provision proves to be over-conservative and is duly released in a weaker quarter, but without any of the headline segregation currently given to charges for the merger with Aurum. The shares rose $0.60 to $75 having already climbed strongly in advance of the results announcement. The company plans a two for one stock split in December having doubled its share price in a single year.
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