Great Plains Hit By Cost Of Siebel Integration - InformationWeek

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Great Plains Hit By Cost Of Siebel Integration

Fourth-quarter revenues increased at a record rate for Great Plains Software Inc., but net earnings declined from the same period last year largely because of costs associated with integrating Siebel Systems Inc. customer-relationship management software into Great Plains' E-business software.

Great Plains (GPSI--Nasdaq) Tuesday reported net income of $1.6 million in its fourth quarter, which ended May 31, compared with net income of $4.6 million for the fourth quarter last year. Revenue for the fourth quarter was $59.6 million, a 48% increase over the $40.1 million last year. Revenues for the fiscal year ending May 31 increased 44% to $194.9 million, compared with $134.9 million for the previous year. Net income for the year hit $13.3 million, stagnant from last year's $13.4 million.

A company spokesperson says post-Y2K sales were slower than expected, dragging down fourth-quarter results, while the costs of integrating and marketing Siebel CRM Mid-Market Edition with Great Plains products took a toll on profits. During the quarter, the company paid to train internal marketing and support personnel as well as the network of consultants that provide Great Plains' field services and sales.

The cost of Great Plains' recent $140 million purchase of privately held Solomon Software Inc. will hit in the first quarter of fiscal 2001, which ends Aug. 31. The Solomon purchase will be financed by a $35 million cash payment and issue of about 2.6 million shares of common stock. The combined company will have more than 130,000 customers, 2,000 channel partners, and 2,200 employees. Solomon will operate as a separate business unit.

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