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Baan sees $250M 4Q loss
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January 20, 1999: 8:04 a.m. ET
Dutch business software maker cites restructuring; shares tumble
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LONDON (CNNfn) - Dutch business software maker Baan warned of a massive fourth-quarter loss and management changes Wednesday, sending its shares into a tailspin once more.
Baan stock tumbled almost 10 percent to 8.9 euros in Amsterdam on the news, accelerating a steep decline that has seen the shares collapse from a 12-month high of 49.33 euros, reached last April.
Baan said it will likely post a fourth-quarter loss of $250 million for the three months ended December 31, 1998. The company blamed the bulk of the loss on its "aggressive restructuring," begun after its last profit warning several months ago. Charges for personnel reductions and closing businesses will account for $160 million of the quarterly loss.
Baan also announced major changes to its management structure. An extraordinary meeting of shareholders is being called to appoint several additional members to the company's board. At the moment the supervisory board has only three members. Founder Paul Baan, a majority shareholder, has said he will not sit on the supervisory board, and it's expected that outside directors will be brought in.
A change in accounting treatment in the group's recent purchase of CAPS Logistics means Baan's third-quarter profit is lower than previously reported. The third-quarter earnings loss is now $0.24, versus the $0.16 deficit originally reported.
Baan's troubles fed through into other European technology stocks. German rival SAP (FSAP3), which issued its own profit warning earlier this month, slid 3 percent to 303 euros in Frankfurt trading.
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