Baan Company Reports First-Quarter 1999 Results /

Baan Company N.V. (ASE: BAAN; Nasdaq: BAANF) today announced results for its first quarter ended March 31, 1999. Revenues for the first quarter 1999 were $176 million compared with revenues of $179 million in the first quarter of last year. The net loss for the quarter was ($19) million, or ($0.09) per diluted share, compared with net income of $2 million, or $0.01 per diluted share in the first quarter 1998. License revenue for the first quarter of 1999 was $65 million. The Company recorded a record of over 600 license transactions during the quarter, a 75% increase over the prior year. The Company reported a 28% increase in maintenance and service revenues to a record $111 million, or 63% of total revenue as compared to 48% the year prior. Deferred revenue at the end of first quarter 1999 was $163 million, approximately equal to the year-end 1998 levels. Operating expense and cost of revenues fell by approximately 20% to $202 million, compared to the third quarter 1998 prior to the commencement of the restructuring. Cash balances on March 31, 1999 were $125 million. Excluding non-recurring items, cash used in operations was ($24) million. "Results for the quarter were better than the analysts' consensus projection," said Jim Mooney, Chief Financial Officer, Baan Company. "In the first quarter, the Company achieved its previously announced cost reduction targets and we believe our cost structure moving forward positions us well in what we expect will continue to be a difficult and challenging market. To further bolster the Company's financial resources, we are working with a consortium of international banks to increase our line of credit to $75 million." Operating Highlights The Company continued to achieve its goals and noted the following accomplishments since its last earnings announcement. * Significant new customers, and those committing to additional seats include: Paccar, Simplex, Thomson and USINOR adopted Baan ERP; Akzo, Barclays, EDS and Volvo purchased BaanFrontOffice solutions; Booze Allen Hamilton, Caterpillar and Hitachi purchased Baan Supply Chain and Logistics products; and Air Afrique, Navion and UUNET embraced the CODA and Baan Financials products. * The shareholders approved a new Supervisory Board of Directors. Existing directors William Grabe, David Hodgson and Hans Wortmann were re-appointed. New directors include new Chairman of the Supervisory Board, Pierre Jean Everaert -- Former CEO of Koninklijke Ahold and former member of the board of management of Philips Electronics N.V.; John W. Barter -- Former Executive Vice President and CFO, AlliedSignal, Inc.; Henk van den Breemen -- Former Chief of Defense Staff, Dutch Armed Forces (retired); Joop P.M. Janssen -- Chairman of the Board of Directors of Heijmans, N.V.; and Koichi Nishimura -- Chairman of the Board, President and CEO of Solectron Corporation. * Baan Company continues to attract strong individuals to its leadership team. Recent management appointments include: James F. Mooney, Chief Financial Officer -- previously VP and Chief Financial Officer, Americas, IBM Corporation; Andrew Dailey, Sr. VP Product Marketing -- previously Research Director, Enterprise Resource Planning (ERP), Gartner Group; Ronald Florisson, VP Corporate Communications -- previously Director of Information for the Ministry of Finance of The Netherlands; Katrina Roche, GM Supply Chain Solutions -- previously president and CEO of Cygnus Technology. Other executive promotions include Steve Pugh, GM CODA. "The record number of transactions in the first quarter, along with the seasoned additions to the management team and board of directors demonstrate Baan Company is back as a leading player in the enterprise applications market," said Tom Tinsley, Chairman and CEO of Baan Company. "Our strategy to increase the portion of revenue from our 2,000 person-strong customer services organization is working to help provide a more-predictable and sustainable revenue source." Recent Product Announcements * Baan Company recently launched the Baan E-Enterprise(TM) suite of Web-enabled enterprise software applications that facilitate business between the entire "value chain" of employees, partners, resellers and suppliers. The suite includes Baan E-Collaboration(TM), Baan E-Sales(TM), and Baan E-Procurement(TM). Baan E-Collaboration is an XML-based supply chain collaboration solution that provides greater access to enterprise information. It enables business partners to interact online to improve accuracy of communications, decrease supply chain cycle times, and reduce overall cost of doing business. Baan E-Sales is an Internet-based, unassisted sales solution that enables businesses to sell direct or through channel partners. Baan E-Procurement is an intranet-based, indirect procurement solution for Baan ERP that can reduce cost of procurement by 80% compared to paper-based systems. Components of the Baan E-Enterprise are available beginning in April, 1999. * The Company also shipped several new products including: BidPro, a new product to assist manufacturers in evaluating transportation alternatives and select carriers from competing bids; BaanEDM, Baan's analytical application suite that allows integrated analysis of information across the complete suite of Baan Company products; BaanFrontOffice '99 including support for nine European and Asian languages; and BaanInternetConfigurator, an Internet-based interactive selling solution. * Baan Education announced BaanEASE, a revolutionary Electronic Performance Support System, and BaanLIVE, a Web-based distance learning environment where an instructor can teach students remotely via the Internet. * Baan Company received numerous industry awards during the quarter. A recent survey by Dataquest of 5000 IT users in Southeast Asia gave Baan Company the highest customer satisfaction level of any of the ERP vendors in the region; Baan Education won an International Merit Award from the Society for Technical Communications for its BaanFrontOffice Course materials. "Investment in research and development remains a top priority for Baan Company," said Mary Coleman, President of Baan Company. "There are approximately 1,600 members of the Research and Development teams around the globe. Total net R&D expense was over $37 million last quarter alone. Baan Company is committed to maintaining its leadership role with innovative products and market-leading vision for enterprise applications." About Baan Company Founded in 1978, Baan Company (ASE: BAAN; Nasdaq: BAANF) is a leading global provider of enterprise business software. Baan Company offers a comprehensive portfolio of best-in-class, component-based applications for front office, corporate office, and back office automation are in use at approximately 12,000 customer sites worldwide. Baan Company products reduce complexity, improve core business processes, are faster to implement and use, are more flexible than our competitors' in adapting to business changes, and optimize the management of information throughout the entire value chain. Baan Company has dual headquarters in Barneveld, The Netherlands and Reston, Virginia, USA and can be found on the World Wide Web at . Statements in this press release using the words "believes," "expects," "anticipates," and the like are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, and as such are subject to a number of risks and uncertainties that could significantly affect outcomes. Actual outcomes, therefore, may differ materially from the expectations, estimates, or assumptions expressed in or implied by any such statements. Typical risks and uncertainties may be reviewed in the Baan Company's public filings on file with the U.S. Securities and Exchange Commission (including its most recent Form 20-F and 6-K). "Baan" is a registered trademark of Baan Company, and any trade, product, or service name referenced in this release using the name "Baan" is a trademark and/or property of Baan Company. All other company, product, and service names may be trademarks of their respective owners. For more information, please contact: Baan Company (For Investor Relations) Mark Wabschall or David Spille Phone: +1.703.467.3201 and +31.(0)34.242.8609 Email: Baan Company (For Media) Ronald Florisson, Vice President of Corporate Communications Phone: +31(0)34.242.8786 (Europe) or +1 703-467-3000 (North America) BAAN COMPANY N.V. CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)

March 31, 1999 December 31, 1998



Cash and cash equivalents $ 125,332 $ 205,751

Short-term marketable securities 266 1,080

Trade accounts receivable, net 241,066 252,129

Income tax receivable 41,259 45,045

Other current assets 72,263 67,032

TOTAL CURRENT ASSETS 480,186 571,037 Property and equipment, at cost 122,830 129,267

Less accumulated depreciation (70,434) (66,569)

Net property and equipment 52,396 62,698 Software development costs, net 77,438 78,319

Intangible assets, net 91,570 52,644

Other non current assets 41,945 52,156 TOTAL ASSETS $ 743,535 $ 816,854



Short-term borrowings from banks $ 556 $ 523

Accounts payable and other

current liabilities 219,325 255,269

Income taxes payable 25,619 43,441

Deferred revenue 144,144 147,933

TOTAL CURRENT LIABILITIES 389,644 447,166 Long-term debt 190,505 191,013

Other long-term liabilities 22,495 4,084

Long-term deferred revenue 19,045 17,831 Common stock and additional paid-in-capital 395,100 393,599

Accumulated deficit (254,339) (235,261)

Accumulated translation adjustment (18,915) (1,578)




($ in thousands, except per share amounts)


Three Months Ended March 31,

1999 1998

Net revenues:

License revenue $ 65,178 $ 92,905

Maintenance and service revenue 110,593 86,572

Total net revenues 175,771 179,477

Cost of revenues:

Cost of license revenue 14,392 7,176

Cost of maintenance and service revenue 84,545 68,996

Total cost of revenues 98,937 76,172

Gross profit 76,834 103,305

Operating expenses:

Sales and marketing 49,057 47,531

Research and development 36,788 30,675

General and administrative 16,862 22,307

Total operating expenses 102,707 100,513

Income (loss) from operations (25,873) 2,792

Other income (expense), net (1,382) 349

Income (loss) before income taxes (27,255) 3,141

(Provision) benefit for income taxes 8,177 (1,005) Net income (loss) $(19,078)$ 2,136

Net income (loss) per share:

Basic $ (0.09)$ 0.01

Diluted $ (0.09)$ 0.01

Shares used in computing per share amounts:

Basic 205,038 194,630

Diluted 205,038 211,398 ots Original Text Service: Baan Company N.V. Internet: Contact: Investor Relations -- Mark Wabschall or David Spille, 703-467-3201 and +31-0-34-242-8609 or, or Media -- Ronald Florisson, Vice President of Corporate Communications, +31-0-34-242-8786, Europe, or 703-467-3000, North America, all of Baan Web site:


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