2001 - Bedford Funding · Claymore Systems Group Collier-Jackson, Inc. Comp-Tech Incorporated...
Transcript of 2001 - Bedford Funding · Claymore Systems Group Collier-Jackson, Inc. Comp-Tech Incorporated...
20012005Insolvency to Innovationthe five-year record
Special Shareholders Meeting January 19, 2006
Geac Shareholder Book 1/9/06 10:43 AM Page 2
“Innovation,” argued Joseph Schumpeter, led to gales of “creative
destruction” as innovations caused old inventories, ideas, technologies,
skills, and equipment to become obsolete. The question, as Schumpeter
saw it, was not “how capitalism administers existing structures,... [but]
how it creates and destroys them.” This creative destruction, he
believed, caused continuous progress and improved standards.
Capitalism, Socialism and Democracy (1942) Joseph R. Schumpeter
Professor of Economics, Harvard University Founding President, The Econometric Society
Creative Destruction
FINANCIAL CONDITION | 1 (five-year perspective)
STRATEGY | 3
SHAREHOLDERS | 6
CUSTOMERS | 10
EMPLOYEES | 12
�
TABLE OF CONTENTS
Geac Shareholder Book 1/9/06 10:43 AM Page 3
P. 1�
FINANCIAL CONDITION STRATEGY | SHAREHOLDERS | CUSTOMERS | EMPLOYEES
Status of Geac — Then and Now
April 30, 2001 July 31, 2003 Current
Share Price (US$) US$1.12 US$3.59 To be acquired forUS$11.10 per share
Market Capitalization US$69 million US$302 million US$1 billion
Cash Net of Bank (US$2.1 million) US$85.7 million US$226.5 millionIndebtedness
Current Assets US$137 million US$169 million US$288 million
Current Liabilities US$305 million US$222 million US$166 million
Credit Line US$225 million US$50 million US$150-US$200 credit facility in from Wells Fargo million credit line default. Geac Foothill available led byforced to repay (to be signed) Bank of America
and Citigroup, and including JP Morgan Chase, CIBC, Malayan Banking, and Standard Federal Bank
License Revenues 11% of total FY01 12% of total FY03 16% of total FY05 revenue, revenue, almost all revenue, almost all of which 26% was from from tier upgrades from tier upgrades the sale of newly and additional seats and additional seats developed products
Pending Event Credit line expiration, Purchase of Comshare Sale of companyextensions from banks
Geac Shareholder Book 1/9/06 10:43 AM Page 4
P. 2�
FINANCIAL CONDITION STRATEGY | SHAREHOLDERS | CUSTOMERS | EMPLOYEES
Overview of the Past Five Years
Stock Chart (US$)
Summary Financial Statement (Fiscal Year Ending April 30)
– Nov-05
– Sep-05
– Jul-05
– May-05
– Mar-05
– Jan-05
– Nov-04
– Sep-04
– Jul-04
– May-04
– Mar-04
– Jan-04
– Nov-03
– Sep-03
– Jul-03
– May-03
– Mar-03
– Jan-03
– Nov-02
– Sep-02
– Jul-02
– May-02
– Mar-02
– Jan-02
– Nov-01
– Sep-01
– Jul-01
– May-01
– Mar-01
– Jan-01
– Nov-00
$12 –
$10 –
$8 –
$6 –
$4 –
$2 –
$0 –
11-7-05: Sale to GoldenGate Capital announced
9-10-03: US$50 million creditfacility from Wells Fargo Foothill
10-15-03: Donna de Winterpromoted to CFO
9-27-01: Geac raises C$27million by issuing stock
7-18-03: Charles S. Jonesbecomes CEO & President
6-23-03: Geac announcesaquisition of Comshare.Completed 8-15-03
8-26-02: Geac announcesacquisition of Extensity.Completed 3-26-03
11-3-00: Charles S. Jones appointedExecutive Chairman. John E. Caldwellappointed interim President & CEO
5-31-01: C$20 million raise announced through issueof stock and special warrants. Issue complete 6-29-01
2-3-04: NASDAQ Listing
8-11-05: $150-$200 million creditline led by Bank of America andCitigroup announced
Shar
e Pr
ice
(US$
)
US$ Millions FY2001 FY2002 FY2003 FY2004 FY2005(Except Earnings per Share)
Software $ 59.8 $ 53.4 $ 49.4 $ 65.2 $ 71.0
Support & Services $ 442.9 $ 370.8 $ 328.5 $ 355.0 $ 360.9
Hardware $ 49.2 $ 33.1 $ 30.6 $ 25.1 $ 12.4
Total Revenues $ 551.9 $ 457.3 $ 408.5 $ 445.3 $ 444.4
EBITDA $ 57.4 $ 85.6 $ 65.7 $ 87.7 $ 100.2
EBITDA Margin 10.4% 18.7% 16.1% 19.7% 22.5%
Net Income $ (169.1) $ 33.7 $ 31.9 $ 57.2 $ 77.0
Net Income Margin -30.6% 7.4% 7.8% 12.8% 17.3%
Earnings per Share (US$) $ (2.72) $ 0.45 $ 0.39 $ 0.66 $ 0.87
Geac Shareholder Book 1/9/06 10:43 AM Page 5
P. 3�
FINANCIAL CONDITION STRATEGY SHAREHOLDERS | CUSTOMERS | EMPLOYEES
Change and Focus
Getting Strategic Focus: Defining a Single Audience Geac is the software solution for the Chief Financial Officer. Whether our customers have a need todo more with less as a result of an increasingly competitive environment, or as a result of regulatorypressure, Geac provides best-in-class technology solutions for the issues confronting the ChiefFinancial Officer.
Geac Change Pie
SHAREHOLDERS
EMPLOYEES
New Products
Pricing
ApplicationSystems
InfrastructureDevelopment
FiscalDiscipline
ROISales Mgmt.
Channels
Value forMaintenance
Acquisitions
Partnering
Market ResearchCustomer FocusCompetitive IntelligenceIndustry Analysis
Training
MPC (Budgeting and Planning)
Processes/Procedures
Real EstateLegal Disciplines
Benchmarking MetricsContinuous Improvement
SOX Compliance Systems
Salesforce.com (CRM)
Softrax (Contract Mgmt.)
Employee CommunicationsPerformance Management
Fulfilling the Vision —Performance & Strategy
ReshapingMarketing
ReculturingEmployeeManagement
CUSTOMERS
Geac Shareholder Book 1/9/06 10:43 AM Page 6
P. 4
Getting Strategic Focus
Over 2 Decades, More than 40 Legacy Software Acquisitions
Building One Company Around Gartner’s Financial Value Chain
�
FINANCIAL CONDITION STRATEGY SHAREHOLDERS | CUSTOMERS | EMPLOYEES
�Advanced BusinessTechnologies
�Clarus Corporation (Assets) �Claymore Systems Group �Collier-Jackson, Inc. �Comp-Tech Incorporated �Compro �Comshare �Control Transaction
Corporation �Convergent Solution Pty. Ltd. �Cruickshank Technology Pty. �Cybergraphic Group �Datamark International Limited
�DDN Holdings Northern Ltd. �Dun & Bradstreet Software
Services �EBC Informatique �ECI Computer Inc. �Extensity �Fasfax Corporation �Florida Computer & Network �FGH Decision Support
Systems �Gazette Technologies �Hotel Computer Systems
Limited �Hotel Systems Pty. Limited �JBA Holdings plc
�JBA Italia s.r.l. �LIBRA Corporation
Signature Divison �Management Data GmbH �Matrix Publishing Systems �MJC Systems Spol. S.r.o. �New Tech Hospitality
Systems Ltd. �News Holding/Interealty �OCS Technology Public
Safety Unit �Perc Technical Services �Phoenix Systems Ltd. �Praxa Limited �Princeton Network Systems
�Pro-Mation, Inc. �Real Estate Unit,
GTE Enterprise �Remanco International �RunTime A/S �Software Shop Systems, Inc. �Soluzioni Gestionali srl �Stowe Computing Australia �Stowe Computing
(NZ) Limited �Technology Services Group �Tranti Systems Inc. �TWG Technologies
Note: Geac MPC has been integrated into several enterprise applications: Anael, EnterpriseServer, Property Management, and Local Government all offer performance management functionality.
UmbrellaStrategy
CoreStrategy
BUYBUILDPARTNER
Management
Processes
TransactionsFinancialsFixed AssetsSupply ChainAccountingHR/PayrollProcurementInventory
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P. 5
Geac’s Recent Acquisitions
Umbrella Strategy: Process and Management
�
FINANCIAL CONDITION STRATEGY SHAREHOLDERS | CUSTOMERS | EMPLOYEES
Extensity (NASDAQ: EXTN)
�Expense management software
�Headquarters: Emeryville, CA
�Price: C$74.0 million
�Cash/short-term investments: C$43.9 million
�Tax assets: C$7.6 million
�Completed 3/6/03
�After acquisition, strategy changed, hosted “thin client” product developed
�Converted division losses to profitability with strict cost-cutting initiatives
Comshare (NASDAQ: CSRE)
�Budgeting/planning software
�Headquarters: Ann Arbor, MI
�Price: US$53.8 million
�Net cash/short-term investments: US$14.7 million
�Revenue: US$58.3 million
�Completed 8/14/03
�After acquisition, implemented significant cost cuts and released next-generation MPC product
�Geac also migrated MPC technology into many of its legacy platforms
Geac Shareholder Book 1/9/06 10:43 AM Page 8
P. 6�
FINANCIAL CONDITION | STRATEGY SHAREHOLDERS CUSTOMERS | EMPLOYEES
Comparable Net Income (% of Revenue)
Achieving Above-Average Profitability
Ratios are the most recent 12 months’ total net income after taxes divided by total revenues.
MANU
HUMC
IFSB.ST
INTB.ST
LWSN
SSAG
BOBJ
HYSL
QADI
COGN
SAP
EPIC
GEAC
ORCL
IBSB.ST
30% –
25% –
20% –
15% –
10% –
5% –
0% –
-5% –
-10% –
-15% –
-20% –
26%
23%21%
19%17%
15%
10% 10%8% 7% 6%
-2%
0%
-3%
-13%
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P. 7
Five-Year Historical Performance
Historical Earnings (US$ Millions) and Stock Price (US$)
Five-Year Comparable Stock Performance
�
FINANCIAL CONDITION | STRATEGY SHAREHOLDERS CUSTOMERS | EMPLOYEES
Note: Prices have beenadjusted for splits. Currentprice is the buyout price forGeac and the closing priceas of 1/5/2006 for the othercompanies and indices.
– Dec-05– Oct-05– Aug-05– Jun-05– Apr-05– Feb-05– Dec-04– Nov-04– Sep-04– Jul-04– M
ay-04– M
ar-04– Jan-04– Nov-03– Sep-03– Jul-03– M
ay-03– Apr-03– Feb-03– Dec-02– Oct-02– Aug-02– Jun-02– Apr-02– Feb-02– Dec-01– Oct-01– Aug-01– Jun-01– Apr-01– Feb-01– Jan-01– Nov-00
$100 –
$50 –
$0 –
($50) –
($100) –
($150) –
($200) –
– $12.00
– $10.00
– $8.00
– $6.00
– $4.00
– $2.00
– $0.00
Geac Stock Price (US$)
Geac
Ann
ual E
arni
ngs
(US$
M)
Earnings (US$M) Geac Stock Price (US$)-$169.1
$33.7 $31.9
$57.2
$77.0
Security/Index 4/30/2001 Current Change
Geac (US$) $ 1.12 $ 11.10 889%NASDAQ Composite 2,116 2,277 8%Dow Jones Industrial Avg. 10,735 10,882 1%TSX Average 9,348 11,508 23%
Business Objects $ 36.20 $ 42.59 18%Cognos $ 20.36 $ 34.47 69%Epicor $ 1.15 $ 14.41 1153%Hummingbird $ 19.00 $ 22.53 19%Hyperion $ 11.21 $ 36.16 223%Manugistics $ 33.92 $ 1.80 -95%Oracle $ 16.16 $ 12.79 -21%QAD, Inc. $ 2.91 $ 7.81 168%SAP $ 39.18 $ 47.94 22%
Geac Shareholder Book 1/9/06 10:43 AM Page 10
P. 8
Three-Year Historical Performance
Historical Earnings (US$ Millions)
Historical Operations Cash Flow Less Capital Expenditures (US$ Millions)
�
FINANCIAL CONDITION | STRATEGY SHAREHOLDERS CUSTOMERS | EMPLOYEES
ERP index is equal weights in Lawson, JDA,Epicor, QAD and ManhattanAssociates.
BI/PM index isequal weights inBusiness Objects,Hyperion, Cognos,Actuate andInformatica.– Dec-05
– Nov-05
– Oct-05
– Sep-05
– Aug-05
– Jul-05
– Jun-05
– May-05
– Apr-05
– Mar-05
– Feb-05
– Jan-05
– Dec-04
– Nov-04
– Oct-04
– Sep-04
– Aug-04
– Jul-04
– Jun-04
– May-04
– Apr-04
– Mar-04
– Feb-04
– Jan-04
– Dec-03
– Nov-03
– Oct-03
– Sep-03
– Aug-03
– Jul-03
300% –
250% –
200% –
150% –
100% –
50% –
0% –Geac ERP Index BI/PM Index
$90 –
$80 –
$70 –
$60 –
$50 –
$40 –
$30 –
$20 –
$10 –
$0 – FY2003 FY2004 FY2005
$76.5
$63.0
$27.0
US$
Milli
ons
Geac Shareholder Book 1/9/06 10:43 AM Page 11
P. 9
License Growth
Annual License Revenues: The Growth Driver
Most Recent Quarter Organic License Growth (Adjusted for Acquisitions)
�
FINANCIAL CONDITION | STRATEGY SHAREHOLDERS CUSTOMERS | EMPLOYEES
Note: Adjustments are based on recent acquisitions. Business Objects adjusted for 37 days of SRC acquisition, assumed annual revenue of $27.5 million, license revenue of $9 millionor $750,000 per month. Scala licenses assumed to account for 27.3% of Epicor’s licenses (as was the case in preceding quarter), adjusted for 39 days since Scala was bought 39days into the previous year's quarter. IBS had 3 acquisitions with annual revenues of approx. SEK 200 million per year or SEK 50 million per quarter: licenses assumed to be SEK 15million per quarter. RedDot license contribution unknown, but purchase price was EUR 43.6 million, assume two times revenue price, so revenue of approx. $6 million per quarter, and license revenues of approx $1.5 million/quarter. Oracle growth rate is for application software, using Oracle’s reported figures plus the figures for PeopleSoft for the quarter endedSeptember 30, 2004. Because of the PeopleSoft acquisition, the Oracle growth rate represented in this chart may be materially distorted. For information on any of the companiesincluded above, please refer to published financial statements, quarterly press releases, and MD&A discussion on their respective websites.
– Oct-05– Aug-05– Jul-05– M
ay-05– M
ar-05– Jan-05– Nov-04– Sep-04– Jul-04– Jun-04– Apr-04– Feb-04– Dec-03– Oct-03– Aug-03– Jul-03– M
ay-03– M
ar-03– Jan-03– Nov-02– Sep-02– Jul-02– M
ay-02– Apr-02– Feb-02– Dec-01– Oct-01– Aug-01– Jun-01– Apr-01– Feb-01– Jan-01– Nov-00
$75 –
$70 –
$65 –
$60 –
$55 –
$50 –
$45 –
$40 –
$35 –
– $12.00
– $10.00
– $8.00
– $6.00
– $4.00
– $2.00
– $0.00
Geac Stock Price (US$)
Geac
Ann
ual L
icen
se R
even
ues
(US$
M)
Licenses (US$M) Geac Stock Price (US$)
$59.78
$53.41
$49.38
$65.19
$71.04
MANU
ORCL
QADI
IBSB.ST
COGN
IFSB.ST
HUMC
HYSL
EPIC
BOBJ
SAP
SSAG
GEAC
LWSN
INTB.ST
100% –
80% –
60% –
40% –
20% –
0% –
-20% –
-40% –
-60% –
75%
37%26% 21% 19% 13%
3%5% 5%
-17% -18% -18% -28% -29% -39%
Geac Shareholder Book 1/9/06 10:43 AM Page 12
P. 10
Achieving Industry Recognition
Ventana Affirms Geac’s Product Development in Two Consecutive Reports
�
FINANCIAL CONDITION | STRATEGY | SHAREHOLDERS CUSTOMERS EMPLOYEES
�Ventana Research, a leading Performance Managementresearch and advisory services firm, conducted an assessmentof more than 30 vendors and 70 products for its 2005Performance Management Vendor and Product Scorecard.
�Ventana Research rated Geac's MPC product suite the highest in every category of “align,” “optimize,” and “understand” — the strategic business processes that help companies manage their business performance requirements. Geac was the overall winner in the Ventana Research Scorecard with a score of 97.3%.
Geac Progression on the Gartner Magic Quadrant
Magic Quadrant for CPM Suites, 2005 Geac 3-Year Movement
GeacSAS InstituteOutlookSoft
Cartesis
Longview Solutions
Lawson SoftwareApplix
CodaClarity Systems
CorVu
Oracle PeopleSoft EPM
Systems Union
ALG Software 2003
2004
2005Business Objects
SAP
Niche Players VisionariesVisionaries
Challengers Leaders
Niche Players
Challengers Leaders
Abili
ty to
Exe
cute
Abili
ty to
Exe
cute
Completeness of VisionCompleteness of Vision
Hyperion Solutions
Cognos
Oracle CPM
Geac Movement
Geac Shareholder Book 1/9/06 10:43 AM Page 13
P. 11
Innovation Index: Percentage of License Revenue from Newly Developed Products
�
FINANCIAL CONDITION | STRATEGY | SHAREHOLDERS CUSTOMERS EMPLOYEES
Even with decreases in Geac's development expenditures, Geac's new product introductions andenhancements resulted in ongoing innovation and product development across major product lines.
�In 4Q04, the average enterprise applicationlicense deal over $150K was $231K, and in 2Q06, Geac had increased that figure to $294K.
�Between 4Q04 and 3Q05, Geac closed anaverage of 23 enterprise application deals over$150K, but in the past three quarters has securedan average of 34.
In the above chart, the dark blue segment represents license sales for products developed within the previous year.
�GPM license revenue increased 21.6% �SmartStream license revenue increased 10.9% �RunTime license revenue increased 81.0% �Interealty license revenue increased 240.7% �Libraries license revenue increased 16.8% �Public Safety license revenue increased 9.1%
Incubating Creative Destruction — Business Highlights in FY05
$25 –
$20 –
$15 –
$10 –
$5 –
$0 – 3Q05 4Q05 1Q06 2Q06
US$
Milli
ons
Geac Shareholder Book 1/9/06 10:43 AM Page 14
P. 12
Creating Value for Employees
Employee Stock Purchase Plan Stock Options
Restricted Share Units
�
FINANCIAL CONDITION | STRATEGY | SHAREHOLDERS | CUSTOMERS EMPLOYEES
�In FY05, the Employee Stock Purchase Planachieved over 25% participation in North America.At the offer price of $11.10, this represents gains toemployees of $1.2 million, or 112.8%.
�In FY05, 1.38 million shares of Geac were granted to employees under the Restricted Share Unit plan. At the acquisition price, this represents $15.1 million.
�Stock options granted to employees will be worthUS$36.9 million at the sale price.
�Selected leaders of the future were sent to HarvardBusiness School, Northwestern University (KelloggGraduate School of Management), Wharton Schoolof the University of Pennsylvania, and Queen's School of Business (Kingston, ON) for executive educationcourses.
�In FY01, Geac generated US$142K in revenues per employee compared to $205K in FY05.
Revenue per Employee (US$)$220 –
$200 –
$180 –
$160 –
$140 –
$120 –
$100 – FY01 FY02 FY03 FY04 FY05
$2.5 –
$2.0 –
$1.5 –
$1.0 –
$0.5 –
$0 – Paid by
EmployeesReceived
$80 –
$70 –
$60 –
$50 –
$40 –
$30 –
$20 –
$10 –
$0 – Strike Price
EndingValue
$16 –
$14 –
$12 –
$10 –
$8 –
$6 –
$4 –
$2 –
$0 – Open Market
PurchasesReceived
US$
Milli
ons
US$
Milli
ons
US$
Milli
ons
Geac Shareholder Book 1/9/06 10:43 AM Page 15
www.geac.com
Geac Shareholder Book 1/9/06 10:43 AM Page 16
World HeadquartersGeac Computer Corporation Limited100 Fifth AvenueWaltham, MA 02451United StatesTel: 781.672.5900Fax: 781.672.5901
Registered Office and Financial Center11 Allstate Parkway, Suite 300Markham, Ontario L3R 9T8CanadaTel: 905.475.0525Fax: 905.475.3847
North American Headquarters66 Perimeter Center EastAtlanta, GA 30346United StatesTel: 404.239.2000Fax: 404.239.2404
Europe/Middle East/Africa HeadquartersNeedles HouseBirmingham RoadStudleyWarwickshire B80 7ASUnited KingdomTel: +44 (0) 1527.496.200Fax: +44 (0) 1527.496.300
Asia-Pacific HeadquartersLevel 10, 423 Pennant Hills RoadPennant Hills, NSW 1715AustraliaTel: +61.2.9875.9100Fax: +61.2.9875.9190
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