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Gold/Mining/Energy : GEAC.....Canadian best kept secret -- Ignore unavailable to you. Want to Upgrade?

To: Thomas DeGagne who wrote (912)	11/10/1999 8:41:00 PM
From: Dale Geffrey	Respond to of 1571

Here's the release: Wednesday November 10, 8:21 pm Eastern Time Canada Geac cuts costs and jobs in JBA merger By Susan Taylor TORONTO, Nov 10 (Reuters) - Geac Computer Corp. Ltd. (Toronto:GAC.TO - news) said on Wednesday that cost-cutting efforts mean its recent purchase of JBA Holdings Plc will generate positive cash earnings sooner than planned despite a dip in JBA revenue. Markham, Ontario-based Geac's purchase of JBA, Britain's second largest software firm, is the acquisition-hungry company's largest purchase to date. It specializes in software to manage inventories, payrolls and other functions, known as enterprise resource planning or ERP, for several niche markets. Geac, Canada's largest software firm, said that it expects to generate positive cash earnings for the second half of the fiscal year, based on restructuring savings estimated at C$90 million annually. Geac shares dropped C$1.20 on the Toronto Stock Exchange after the announcement to end the session at C$26.50. ''They're in the integration process of a relatively significant acquisition, so there's a bit of confusion there with a lot of people in terms of the accounting,'' said Pierre Boucher, analyst at CT Securities in Montreal. ''All of that creates a bit of uncertainty.'' The acquisition, which has a cash cost of C$220 million, includes C$40 million in debt, a C$15 million restructuring charge, and a C$40 million adjustment for JBA accounting of license and revenue services. The deal closed September 30. While the acquisition is expected to generate positive cash earnings for last half of the fiscal year, before amortization of intangible assets, it will not benefit the second quarter results. In the period ended Oct. 31 the acquisition generated a negative cash impact of C$7-9 million, 11 to 14 Canadian cents per share, on sales of C$40-45 million. JBA sales slowed down while Geac's acquisitions efforts were underway. Excluding JBA operations, Geac said it expected to come in at the high end of consensus expectations of 64 to 70 Canadian cents per share for the second quarter. Geac cuts to operating overhead include laying off nearly 500 employees, or 20 percent of the firm's work force. Approximately 200 services jobs were cut, 150 from duplicate functions for such departments as administration, and 150 from discontinued development projects. ''The decisions are now complete and finalized and there will not be any further phase,'' Geac CEO Doug Bergeron told Reuters. ''We believe strongly, you get through these necessary chapters of revitalizing a business once and you move on.'' The restructuring leaves the merged company with approximately 5,200 staff. ''Since September 21, an army of Geac senior management, including myself, have been traveling around the world completing an extensive post-acquistion examination of our new mid-market ERP business,'' Bergeron said in a conference call with analysts. The company has focused R&D efforts on its core software products and discontinued some development efforts. Sales efforts will be aimed at Geac's strongest markets in food and beverage, auto supply and textile sectors. Those markets will experience a Y2K slump until March, after which growth is pegged at 30 percent, Bergeron said. Geac said it expects the acquisition's cash contribution coupled with its cash reserves will allow the firm to return its attention to its aggressive acquisition program. ''I'm constantly looking at new deals,'' Bergeron said. ''I was looking at something yesterday.'' ($1=$1.47 Canadian)