The Baan Company, in the news yesterday for losing a significant portion of its massive ERP contract with Boeing, today announced the resignation of its chief financial officer and a senior management restructuring programme.
Jan Westerhoud, the CFO, says he is leaving the company for "personal reasons", but is staying on for six months to ease the transition period for his successor, Klaas Wagenaar, who assumes the titles of senior vice president of finance and administration and chief financial officer.
This senior resignation was accompanied by the news that Baan is consolidating its finance and administration organisations, despite sparkling six monthly results to 30 June, filed with the Securities and Exchange Commission on 21 August.
Revenues for the three months were $146 million compared to $88 million last time, and for the six months, $269.9 million versus $166.4 million. In the quarter, net income was $16.3 million compared to $6.8 million, and for the six months, $28.7 million versus $11.2 million.
Baan's general and administrative expenses increased by 55 per cent to $12.1 million in the quarter. The Dutch software supplier says this reflects expansion of operations overall, with a resulting increase in general, personnel and infrastructure costs, like the "hiring of certain key executives into finance and general corporate positions along with the payroll and facilities costs of establishing administrative and finance support personnel across multiple locations".
For example, the management and financial restructuring sees Wagenaar come from Baan Investment BV, the independent research and education arm. Previously, he worked with Cap Gemini in administrative and financial roles. His new responsibilities include finance, legal, and human resources. and his job is it to integrate the geographic regions more closely.
Ralph Zepeda, formerly controller for Global Consulting, is to oversee the activities of regional and divisional controllers as president of finance and corporate controller. Mark Wabschall, previously vice president of finance for Baan Affiliates, is to manage global investor relations as vice president of Finance and Investor Relations from Menlo Park, California. John Schroonbrood, corporate treasurer, is to consolidate treasury functions in Menlo Park.
Regional presidents are promoted to senior vice presidents, said to be in recognition of regional operations' strategic contributions and Baan expects that general and administrative expenses will continue to increase in absolute dollars as it grows senior financial staffing levels.
Worldwide, Baan's sales and marketing expenses increased 66 per cent to $37.2 million in the quarter. Again, Baan attributes these increases to expanding its international sales and the associated hiring of additional staff.
Analysts in the US concur. They say that Baan's expansion is driving its staff and administrative costs, and that north American operations remain an area of concern.
The SEC report acknowledges that: "To support the growth in the north American market, [we] continue to incur significant costs to build infrastructure ahead of anticipated revenues. As a result of this expansion, [we] must continue to implement and improve operational and financial control systems, to expand, train and manage the employee base and form relationships with third party providers."
"These factors have placed, and are expected to continue to place, a significant strain on management and operations," concludes Baan.
Not least, R&D costs soared by 127 per cent to $20.9 million, and the company gives no indication that they will fall in the immediate future.
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