Exhibit (a)(5)(i)
FOR IMMEDIATE RELEASE
BAAN COMPANY RELEASES 1999 AUDITED FINANCIAL STATEMENTS
BARNEVELD, THE NETHERLANDS AND HERNDON, VIRGINIA, USA - JULY 17, 2000 -
Baan Company N.V. (NASDAQ: BAANF; ASE: BAAN) today released its audited
financial statements for the year ended December 31, 1999. The financial
statements include management's opinion that the "operating environment
confronting the Company raises significant uncertainty about the Company's
ability to continue as a going concern."
The Company cited a number of factors supporting its going concern caution,
including:
o The Company incurred net losses of $311.4 million (Dutch
GAAP)/$309.6 million (U.S. GAAP) in 1999 and $315.2 million in
1998, and has experienced seven successive quarters of
operational losses;
o As a result of adjustments made to the financial statements to
account for events subsequent to year-end, the final accounts
reflect a shareholder deficit of ($7.8) million. The Company also
reconfirmed that it will end the second quarter of this year in a
negative equity position. This likely means the Company will be
placed under "special listing conditions" by the Amsterdam
Exchanges, which requires its listed companies to maintain
positive shareholder equity;
o To survive as an independent going concern, the Company must
pursue a fundamental restructuring that will likely reduce the
Company's operations by at least one-half. Securing financing for
that endeavor will likely prove challenging in the current
environment; and
o These and other events have increased concern about the Company's
viability going forward and created a climate where it is
increasingly difficult for the Company to close transactions.
Net revenues for the year ended December 31, 1999 were $619 million (as
compared to $635 million reported when the Company released its unaudited
results on February 3 of this year, and compared to net revenues of $736
million for 1998). Events occurring between year-end and the filing date
must be taken into consideration when evaluating the year end financial
statements. The audited results released today, therefore, reflect
adjustments (as compared to the unaudited results released on February 3,
2000) to account for these subsequent events.
License revenue for 1999 was $193 million ($205 million was reported
February 3), as compared with $336 million for 1998. Maintenance and
service revenue was $426 million ($430 million was reported on February 3),
as compared to $399 million for 1998. The total revenue adjustments of $16
million represent 2.5% of the previously announced revenue total. Total net
adjustments have resulted in a shareholder deficit of ($7.8) million at
year end ($9 million positive shareholder equity was reported in the
February 3 release).
The financial statements also indicate that failure to close the pending
Invensys plc offer to acquire the entire issued shared capital of the
Company for 2.85 Euro "could have a materially adverse effect on the
business and Baan's ability to continue as a going concern." The offer is
currently scheduled to close on July 25 and remains subject to a condition
that 95% of Baan's outstanding shares must tender in support of the offer.
Management believes a failure of the offer to succeed will increase
customer concerns on viability; will accelerate the loss of key personnel
within the organization that will be needed to improve top line revenue and
execute on the necessary restructuring; and will increase the challenges
the Company will face in seeking financing and/or negotiating with other
potential strategic partners.
"The Management and Supervisory Boards of the Company continue unanimously
to support the Invensys offer as the best way to secure Baan's future and
as being is in the best interests of our shareholders, customers, and
employees," said Pierre Everaert, Interim Chief Executive Officer. "I think
the 1999 accounts confirm that additional financing alone will not solve
the issue; we need a strong strategic partner to take the viability issue
off the table and restore customer confidence if we are to return to a
normal business cycle. Invensys is that strong partner."
The Company's 1999 Dutch Statutory Accounts and U.S. Annual Report filed on
Form 20-F are available on the Company Web site at www.baan.com. The Form
20-F has also been filed today with the U.S. Securities and Exchange
Commission.
ABOUT BAAN COMPANY
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Founded in 1978, Baan Company (NASDAQ: BAANF; ASE: BAAN) is a global
provider of enterprise business solutions. Baan Company offers a
comprehensive portfolio of integrated services and best-in-class,
component-based applications that span an organization's entire value chain
including E-Business and Web Commerce, Customer Relationship Management,
Enterprise Resource Planning, Supply Chain Management, and Corporate
Knowledge Management. Deployed at more than 15,000 customer sites
worldwide, Baan Company solutions enable organizations to drive strategic
business growth, improve business processes, reduce operating complexity,
and increase corporate flexibility.
Baan Company has dual headquarters in Barneveld, The Netherlands and
Herndon, Virginia, USA and can be found on the World Wide Web at
www.baan.com.
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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 PUBLIC RELATIONS:
Judith Ingleton-Beer
Phone: +44 (0)1780 721433
Email: [email protected]
Dan O'Leary
Phone: +(202) 828-8819
Email: [email protected]
