On November 3, the Board of Directors of Geac Computer Corporation Limited (TSE: GAC), a Canadian supplier of enterprise management software, announced the appointment of. Charles S. Jones as non-executive Chairman of the Board and. John E. Caldwell as interim President and Chief Executive Officer. These appointments were made following the decision of William Nelson to step down as Chairman and interim Chief Executive Officer of the Company for personal reasons, only one month after his appointment on October 2. Mr. Nelson remains a director of Geac.
The announcement comes only a few weeks after Geac's "profit improvement initiative" announcement. On October 16, Geac announced that it had taken steps to improve future profitability through a comprehensive restructuring program. The Company expects this initiative will reduce annual costs by approximately $60 million, commencing in the third quarter of the current fiscal year. Staff reductions, achieved through a combination of layoffs and attrition, as well as infrastructure cutbacks, will result in a one-time pretax charge of up to $20 million, the majority of which is expected to be taken in the second quarter. In addition, a pre-tax provision of approximately $8 million will be taken in the second quarter for certain claims and legal matters related to contract disputes involving a subsidiary of the former JBA Holdings plc.
William Nelson, Chairman and Chief Executive Officer of Geac at the time, said, "This restructuring initiative was necessary to enhance our competitive position and to restore ongoing profitability. We are experiencing lengthening sales cycles in certain markets, as customers defer software acquisition and related integration and implementation services. The cost reductions coupled with the anticipated seasonal revenue increases should result in improved operating profits and cash flow for the second half of the fiscal year. We also will increase support for our e-commerce businesses. Specifically, we will add resources to our Pyramaz division and e-purchase business of up to $4 million annually to capitalize on its growing pipeline of opportunities. In addition, Interealty.com, AMSI (our property management business) and other e-focused divisions will be maintained at current staffing levels to support ongoing business and product development initiatives."
On September 11, Geac announced results for Q1 2001, which ended July 31, 2000. The revenues for the first quarter from continuhttp://www.technologyevaluation.com/research/articles/one-vendor-s-exploit-of-marrying-infrastructure-with-selling-and-fulfillment-applications-19552/ing operations were $212.5 million compared to $192.7 million for the same period last year. (Revenues in both periods exclude sales made by the Banking Systems business that was sold on July 13, 2000.) Excluding the gain on the sale of discontinued operations noted above, but including the increase in amortization, the fully diluted loss per share from continuing operations was $0.70 during the quarter compared to earnings per share of $0.56 in the first quarter of the prior year (See Figure 1). However, as a result of the sale of the Banking Systems business Geac's balance sheet was significantly strengthened compared to the year-end at April 30, 2000. Bank indebtedness has also been substantially reduced.
Figure 1.
Douglas Bergeron, President and CEO at the time commented: "Our revenues in the quarter were significantly affected by the industry-wide softness in license sales and professional services consulting in addition to the normal seasonal slowdown in our now substantial European business. However, our customer base remains largely intact. We remain confident that revenue will improve during the second half of the year. We have taken steps during the quarter to reduce our costs going forward and are continuing our efforts to manage our costs to reflect properly our anticipated level of business activity."
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The announcement comes only a few weeks after Geac's "profit improvement initiative" announcement. On October 16, Geac announced that it had taken steps to improve future profitability through a comprehensive restructuring program. The Company expects this initiative will reduce annual costs by approximately $60 million, commencing in the third quarter of the current fiscal year. Staff reductions, achieved through a combination of layoffs and attrition, as well as infrastructure cutbacks, will result in a one-time pretax charge of up to $20 million, the majority of which is expected to be taken in the second quarter. In addition, a pre-tax provision of approximately $8 million will be taken in the second quarter for certain claims and legal matters related to contract disputes involving a subsidiary of the former JBA Holdings plc.
William Nelson, Chairman and Chief Executive Officer of Geac at the time, said, "This restructuring initiative was necessary to enhance our competitive position and to restore ongoing profitability. We are experiencing lengthening sales cycles in certain markets, as customers defer software acquisition and related integration and implementation services. The cost reductions coupled with the anticipated seasonal revenue increases should result in improved operating profits and cash flow for the second half of the fiscal year. We also will increase support for our e-commerce businesses. Specifically, we will add resources to our Pyramaz division and e-purchase business of up to $4 million annually to capitalize on its growing pipeline of opportunities. In addition, Interealty.com, AMSI (our property management business) and other e-focused divisions will be maintained at current staffing levels to support ongoing business and product development initiatives."
On September 11, Geac announced results for Q1 2001, which ended July 31, 2000. The revenues for the first quarter from continuhttp://www.technologyevaluation.com/research/articles/one-vendor-s-exploit-of-marrying-infrastructure-with-selling-and-fulfillment-applications-19552/ing operations were $212.5 million compared to $192.7 million for the same period last year. (Revenues in both periods exclude sales made by the Banking Systems business that was sold on July 13, 2000.) Excluding the gain on the sale of discontinued operations noted above, but including the increase in amortization, the fully diluted loss per share from continuing operations was $0.70 during the quarter compared to earnings per share of $0.56 in the first quarter of the prior year (See Figure 1). However, as a result of the sale of the Banking Systems business Geac's balance sheet was significantly strengthened compared to the year-end at April 30, 2000. Bank indebtedness has also been substantially reduced.
Figure 1.
Douglas Bergeron, President and CEO at the time commented: "Our revenues in the quarter were significantly affected by the industry-wide softness in license sales and professional services consulting in addition to the normal seasonal slowdown in our now substantial European business. However, our customer base remains largely intact. We remain confident that revenue will improve during the second half of the year. We have taken steps during the quarter to reduce our costs going forward and are continuing our efforts to manage our costs to reflect properly our anticipated level of business activity."
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