Baan Company Reports Second Quarter 1999 Results

Continued Progress in Financial Performance BARNEVELD, Netherlands and RESTON, Va. (PROTEXT) - Baan Company N.V. (Nasdaq: BAANF; Amsterdam Stock Exchange: BAAN) today announced results for its second quarter ended June 30, 1999. Revenues for the second quarter 1999 were $173 million, which is relatively flat compared to the first quarter 1999 and a 25% decline from the second quarter 1998. The net loss for the second quarter 1999 was ($9) million, or ($0.04) per diluted share, which was less than half the ($19) million net loss, or ($0.09) per diluted share, reported in the first quarter 1999. License revenue for the second quarter 1999 was $54 million, compared to $65 million in the first quarter 1999 and $131 million in the second quarter 1998. For the second quarter in a row, the Company recorded more than 600 license transactions during the quarter, which was an 80% increase over the prior year. The Company reported a 20% increase in maintenance and service revenues to a record $118 million in the second quarter 1999, as compared to the prior year period. Service and maintenance margins improved to 27% in the second quarter 1999, from 24% in the first quarter 1999. The Company continued to lower its overall cost structure and reported total operating expenses and cost of revenues of $184 million for the second quarter 1999, as compared to $202 million in the first quarter 1999. Cash balances on June 30, 1999 were $121 million, which were stable compared to the first quarter 1999 level of $125 million. Recently, the Company increased its line of credit from $19 million to $75 million with a syndicate of banks comprised of ABN AMRO, Deutsche Bank, and Barclays Bank. Currently, there are no borrowings outstanding under this line of credit. The net loss for the first half of 1999 was ($28) million, or ($0.13) per diluted share, compared to net income of $19 million, or $0.09 per diluted share for the same period in 1998. For the six months ended June 30, 1999, revenues were $349 million, compared to $410 million for the same period last year. "The second quarter materialized as expected and the overall results were in line with investment community expectations," said Jim Mooney, Chief Financial Officer, Baan Company. "We delivered on our bottom line objectives through strong expense discipline and continued growth in our services business. We also stabilized our cash position and increased our available financial resources. License revenue continued to be impacted by short-term factors affecting the enterprise applications industry and by the residual impact on sales productivity from the restructuring program. The improvement in our sales pipeline and our recent aggressive marketing investments make us cautiously optimistic that license revenues will grow in the second half of 1999." "The continued progress from the last quarter demonstrates how Baan Company has regained the confidence of its customers, partners and employees," said Mary Coleman, CEO, Baan Company. "Our business is clearly focused and the organization is executing well against our plan. We took difficult and decisive steps earlier this year that allowed us to maintain our commitment to R&D, the results of which are demonstrated by the recent launch of our E-Enterprise suite of products. Today we are well positioned to increase our investment in brand awareness, lead generation, and pipeline development as we enter the second half of 1999. Partners are recognizing our progress with significant investments in joint sales and marketing activities that will help us continue to build on our growing momentum." Operating Highlights The Company continued to achieve its goals and noted the following accomplishments since its last earnings announcement. * The Company signed agreements with significant new and existing customers including: Acer, ADP, American Express, Blue Water Plastics, Disney, Friesland Bank, GTE Telecom, KPN, Met Life, Teknion Furniture Systems, Volvo, Unilever and UUNET. * A successful launch and strong initial market acceptance of the new E-Enterprise Internet suite of web-enabled enterprise software applications. The Baan E-Sales and Baan E-Collaboration products shipped on schedule in June. The Baan E-Procurement product is expected to ship in the third quarter of this year as originally announced. * Key hardware and software partners continued their investments in joint technical, marketing, and sales programs. IBM opened its Baan Implementation Factory in Atlanta, Georgia and announced plans to open a second Baan Implementation Factory in Copenhagen, Denmark. IBM also announced agreements in which Baan Company will offer IBM's DB2 Universal database with BaanERP, and in which IBM will resell Baan Company software. IBM was also named a premier integrator for Baan Company's new E- Enterprise suite of applications. Microsoft and Baan Company continued multiple sales and marketing activities including advertising, web-based seminars, and trade shows. * New Application Service Provider (ASP) partnerships announced during the quarter include Groupe Bull, Metamor Worldwide, Premier Systems Integrators, and Productive Online. These ASP agreements provide customers worldwide with cost- effective access to Baan Company applications over the Internet. * The Company announced upcoming customer and partner events including the Baan Supply Chain user conference Velocity '99 to be held August 17-19 in Atlanta, Georgia, and the BaanWorld conference to be held November 10-12 in Vienna, Austria. About Baan Company Founded in 1978, Baan Company 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. These applications 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 www.baan.com . 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.

BAAN COMPANY N.V.

CONSOLIDATED STATEMENT OF OPERATIONS

($ in thousands, except per share amounts)

(Unaudited)

Three Months Ended Six Months Ended

June 30,

June 30,

1999

1998 1999

1998 Net revenues: License revenue

$54,350 $131,254 $119,528 $224,159 Maintenance and

service revenue

118,450

98,825 229,043 185,397 Total net revenues

172,800 230,079 348,571 409,556 Cost of revenues: Cost of license

revenue

12,897

6,444

27,289 13,620 Cost of maintenance

and service

revenue

85,997

67,879 170,542 136,875 Total cost of

revenues

98,894

74,323 197,831 150,495

Gross profit

73,906 155,756 150,740 259,061 Operating and

non-recurring

expenses: Sales and marketing

36,536

53,110

85,593 100,608 Research and

development

30,962

35,453

67,750 66,128 General and

administrative

17,255

27,852

34,117 50,192 Non-recurring

expenses

424

14,400

424 14,400 Total operating and

non-recurring

expenses

85,177 130,815 187,884 231,328 Income (loss) from

operations

(11,271) 24,941 (37,144) 27,733 Other income

(expense), net

(1,864)

164

(3,246)

513 Income (loss) before

income taxes

(13,135) 25,105 (40,390) 28,246 (Provision) benefit

for income taxes

3,941

(8,034) 12,118

(9,039) Net income (loss)

$(9,194) $17,071 $(28,272) $19,207 Net income (loss)

per share: Basic

$(0.04)

$0.09 $(0.13) $0.10 Diluted

$(0.04)

$0.08 $(0.13) $0.09 Shares used in computing

per share amounts: Basic

210,889 197,275 210,444 195,953 Diluted

210,889 212,000 210,444 211,699

BAAN COMPANY N.V.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

June 30, December 31,

1999

1998 ASSETS CURRENT ASSETS Cash and cash equivalents

$121,003 $205,751 Short-term marketable securities

694

1,080 Trade accounts receivable, net

236,578

252,129 Income tax receivable

21,841

45,045 Due from related parties

5,060

6,297 Other current assets

64,240

67,032

TOTAL CURRENT ASSETS

449,416

577,334 Property and equipment, at cost

117,433

129,267 Less accumulated depreciation

(74,203) (66,569) Net property and equipment

43,230

62,698 Software development costs, net

80,532

78,319 Intangible assets, net

86,782

52,644 Other non-current assets

36,550

52,156 TOTAL ASSETS

$696,510 $823,151 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings and current

portion of long-term debt

$10,314

$523 Accounts payable and other current

liabilities

195,948

261,566 Income taxes payable

20,390

43,441 Deferred revenue

129,380

147,933 TOTAL CURRENT LIABILITIES

356,032

453,463 Long-term debt

190,232

191,013 Long-term deferred revenue

15,653

17,831 Other long-term liabilities

21,772

4,084 Common stock and additional

paid-in-capital

400,242

393,599 Accumulated deficit

(263,533) (235,261) Accumulated translation adjustment

(23,888)

(1,578) TOTAL SHAREHOLDERS' EQUITY

112,821

156,760 TOTAL LIABILITIES & SHAREHOLDERS'

EQUITY

$696,510

$823,151 ots Original Text Service: Baan Company Internet: http://www.newsaktuell.de Contact: Investor Relations, Mark Wabschall or David Spille, dspille@baan.com, 703-467-3201, or +31-34-242-8609, or Media, Ronald Florisson, Vice President of Corporate Communications, rfloriss@baan.nl, or 703-467-3000, or +31-34-242-8786, all of Baan Company Web site: http://www.baan.com

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