Baan Company Reports Third Quarter 1999 Results / Substantial New Multi-Product Contract with Boeing

BARNEVELD, Netherlands and HERNDON, Va. (PROTEXT) - BaanCompany N.V. (Amsterdam: BAAN; Nasdaq: BAANF) today announcedresults for its third quarter ended September 30, 1999. Revenuesfor the third quarter 1999 were $143 million, compared to $195million in the third quarter 1998. The net loss for the thirdquarter 1999 was ($25) million, or ($0.12) per diluted share,compared to a net loss of ($40) million, or ($0.20) per dilutedshare, reported in the third quarter 1998. The Company also announced that during the third quarter TheBoeing Company, which currently has more than 200,000 employeesworldwide, signed a 5-year enterprise-wide contract that willprovide Boeing with full access to the complete Baan solution --including Baan E-Enterprise(TM), Baan Front Office, Baan SupplyChain and BaanERP. The agreement should substantially expand thenumber of Boeing users of Baan software over the term of theagreement. Further details are being withheld pending a jointBaan/Boeing press release. License revenues for the third quarter 1999 were $36 million,and maintenance and service revenues were $107 million. Serviceand maintenance margins improved to 28% in the third quarter 1999from 24% a year earlier. Total operating expenses and cost ofrevenues were $170 million for the third quarter 1999, ascompared to $249 million in the corresponding period of 1998.Additional financial details are available on the Baan Web siteat www.baan.com. Cash and marketable securities balances on September 30, 1999were $149 million compared to the second quarter 1999 level of$122 million. The Company's line of credit and equityarrangements also provide for the potential of an additional $175million of future funding. "Our results reflect the impact of the shift in Baan'sbusiness models towards more subscription-based licensingagreements," said Jim Mooney, Chief Financial Officer, BaanCompany. "Under subscription-based licensing, customers pay aper-user per-month fee for rights to Baan's products rather thana one-time up-front fee. While this impacts short-term licenserevenue, it builds long-term customer commitment, makes it easierfor customers to use more of our applications, and creates anongoing revenue stream. Large companies such as Boeing thisquarter, and KPN earlier this year, joined the many othercustomers who see competitive advantage in licensing Baansoftware on a subscription basis." "We also saw customer demand for Baan's complete, integratedsuite of enterprise solutions. In the third quarter, more than35% of our contract value came from customers who licensed two ormore of our integrated ERP, financials, supply chain, frontoffice or e-commerce solutions," continued Mooney. "Baan is theonly enterprise applications vendor to deliver end-to-endsolutions today. We believe this provides us with strongcompetitive differentiation." "Baan has anticipated the fundamental shifts in businessmodels in the enterprise applications market and built itsbusiness model accordingly," said Mary Coleman, chairman and CEO,Baan Company. "We have continued to invest in research anddevelopment to extend our lead in end-to-end applicationintegration, and to deliver our new suite of Baan E-Enterpriseapplications. While we expect the balance of 1999 will continueto be a difficult year for the enterprise applications market asa whole, we are encouraged by the positive response to ourrenewed investment in marketing and brand awareness." Operating Highlights The Company noted the following accomplishments since its lastearnings announcement. -- Signed more than 500 contracts with new and existingcustomers including: Azo, Boeing, Coca-Cola, Fuji HeavyIndustries, GTE, Hitachi, Ikea, Komatsu, Sonoco, TWR, Toshiba, USFilters, and Wal-Mart. Three-fourths of the transactions duringthe quarter were from install-base customers. -- The announcement of the new Baan E-Procurement(TM) product,an Intranet-based self-service requisitioning software solutionfor indirect purchasing that complements the purchasing module ofBaanERP. Baan E-Procurement streamlines procurement for companiesencumbered with complex, hard-to-control, costly procurementprocedures. -- The company also saw continued strong initial marketacceptance of the new Baan E-Enterprise Internet suite of Web-enabled software applications including Baan E-Sales(TM), Baan E-Configuration(TM) and Baan E-Procurement. Customers, such asMagnabyte were able to put Baan E-Enterprise solutions intoproduction in less than 30 days. -- The acquisition of companies providing solutions built inthe Baan environment including; Proloq, which provides extensionsto BaanERP for process industries like primary metals, pulp andpaper and others; and BAIN which developed Product DataManagement (PDM) extensions to BaanERP. Baan also acquiredownership of the Dynamic Enterprise Models (DEM) from Triarch.DEM allows organizations to model their business processes andspeed configuration and customizations of Baan products. BAIN andTriarch were members of the Vanenburg Group. -- The appointment of three new key executives to themanagement team. Appointments include: Mike Shinya as Presidentof its EMEA (Europe, Middle East and Africa) region. Shinya joinsBaan from Oracle; Charlie Callahan as Senior Vice President ofBaan Consulting. Callahan joins Baan from Booz Allen & Hamilton;Katrina Roche to the newly created position of Senior VicePresident, Chief Marketing Officer. Roche has served for the pastyear as the General Manager of Baan Supply Chain Solutions. -- The launch of the first stage of a new $25 millionadvertising and lead generation program in the United States,Canada and Europe. The campaign includes print advertisingplacements in leading newspapers such as the Wall Street Journaland New York Times, as well as leading trade and industrymagazines. The campaign will continue to roll out through UnitedKingdom, Germany, Netherlands and other European countriesthroughout the fourth quarter. -- More than 350 customers and partners attended Velocity, theSupply Chain Users Conference in Atlanta, Georgia. More than1,000 customers and partners attended the Baan World Usersconference in Los Angeles, California. Baan will announce a series of new products and servicesbefore an expected audience of more than 5,000 customer andpartners at its annual global BaanWorld conference meeting inVienna, Austria, being held from November 11-13, 1999.Information on BaanWorld is available at www.Baanworld.com About Baan Company Founded in 1978, Baan Company is a global provider ofenterprise business solutions. Baan Company offers acomprehensive portfolio of integrated services and best-in-class,component-based applications that span an organization's entirevalue chain including E-Business and Web Commerce, CustomerRelationship Management, Enterprise Resource Planning, SupplyChain Management, and Corporate Knowledge Management. Deployed atmore than 13,000 customer sites worldwide, Baan Company solutionsenable organizations to drive strategic business growth, improvebusiness processes, reduce operating complexity, and increasecorporate flexibility. Baan Company has dual headquarters in Barneveld, TheNetherlands and Herndon, Virginia, USA and can be found on theWorld Wide Web at www.baan.com. Statements in this press release using the words "believes,""expects," "anticipates," and the like are forward-lookingstatements within the meaning of the Securities Exchange Act of1934, as amended, and as such are subject to a number of risksand uncertainties that could significantly affect outcomes.Actual outcomes, therefore, may differ materially from theexpectations, estimates, or assumptions expressed in or impliedby any such statements. Typical risks and uncertainties may bereviewed in the Baan Company's public filings on file with theU.S. Securities and Exchange Commission (including its mostrecent Form 20-F and 6-K). "Baan" is a registered trademark of Baan Company, and anytrade, product, or service name referenced in this release usingthe name "Baan" is a trademark and/or property of Baan Company.All other company, product, and service names may be trademarksof their respective owners. BAAN COMPANY

Consolidated Statement of Operations

($ in thousands, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

1999

1998

1999

1998

Net revenues:

License revenue

$35,880 $86,611 $155,408 $310,770

Maintenance and

service revenue 106,950 108,351 335,993 293,748

Total net revenues 142,830 194,962 491,401 604,518

Cost of revenues:

Cost of license

revenue

13,745

7,340 41,034

20,960

Cost of maintenance

and service

revenue

76,911 82,665 247,453 219,540

Total cost of

revenues

90,656 90,005 288,487 240,500

Gross profit

52,174 104,957 202,914 364,018

Operating and

non-recurring expenses:

Sales and marketing

28,337 80,187 113,930 180,795

Research and

development

31,513 46,347 99,263 112,475

General and

administrative

19,418 32,596 53,535

82,788

Non-recurring

expenses

0

0

424

14,400

Total operating and

non-recurring

expenses

79,268 159,130 267,152 390,458

Income (loss) from

operations

(27,094) (54,173) (64,238) (26,440)

Other income

(expense), net

(2,176)

(447) (5,422)

66

Income (loss) before

income taxes

(29,270) (54,620) (69,660) (26,374)

(Provision) benefit

for income taxes

4,581 14,940 16,699

5,901

Net income (loss)

$(24,689)$(39,680)$(52,961) $(20,473)

Net income (loss) per share:

Basic

$(0.12) $(0.20) $(0.25) $(0.10)

Diluted

$(0.12) $(0.20) $(0.25) $(0.10)

Shares used in computing per share amounts:

Basic

214,016

199,069

212,899

196,991

Diluted

214,016

199,069

212,899

196,991

BAAN COMPANY N.V.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

September 30, December 31,

1999

1998

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$115,850

$205,751

Short-term marketable securities

32,917

1,080

Trade accounts receivable, net

231,240

252,129

Income tax receivable

14,923

45,045

Due from related parties

0

6,297

Other current assets

65,796

67,032

TOTAL CURRENT ASSETS

460,726

577,334

Property and equipment, at cost

120,900

129,267

Less accumulated depreciation

(81,188)

(66,569)

Net property and equipment

39,712

62,698

Software development costs, net

111,033

78,319

Intangible assets, net

90,270

52,644

Other non current assets

16,958

52,156

TOTAL ASSETS

$718,699

$823,151

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Short-term borrowings and

current portion of long-term debt $25,323

$523

Accounts payable and other

current liabilities

163,854

261,566

Income taxes payable

16,752

43,441

Due to related parties

1,943

0

Deferred revenue

125,784

147,933

TOTAL CURRENT LIABILITIES

333,656

453,463

Long-term debt

190,188

191,013

Long-term deferred revenue

16,631

17,831

Other long-term liabilities

39,564

4,084

Common stock and additional

paid-in-capital

457,335

393,599

Accumulated deficit

(288,222)

(235,261)

Accumulated translation adjustment (30,453)

(1,578)

SHAREHOLDERS' EQUITY

138,660

156,760

TOTAL LIABILITIES &

SHAREHOLDERS' EQUITY

$718,699

$823,151ots Original Text Service: Baan Company N.V. Internet:http://www.newsaktuell.de Contact: Phil Van Etten or DaveSpille, investors, +1-703-234-6275, North America, or +31-34-242-8609, Europe, or dspille@baan.com, or Katrina Roche, Senior VicePresident, Chief Marketing Officer, media - Europe, +31-34-242-8786, or kroche@baan.com, all of Baan Company; or GeorgeThompson, for Baan Company, media - North America, +202-828-9708,or press@baan.com Web site: http://www.baan.com

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