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PRODUCT DISPOSALS HURT SAGE EARNINGS

Guy Berruyer, SageThe sale of non-core products by Sage pushed its operating earnings for the half ended March 31 to a loss of about $12 million. The loss was triggered by a roughly $306 million charge for the sale of applications such as Sage Fund 100, Act and SalesLogix, along with some products in Europe. That compared to EBITDA of about $206 million in last year's first half, calculated at current exchange reports. Sage North America had revenue of $325 million, up 4 percent organically.
The company did not report actual North American revenue, which I presume means the company views the revenue of the disposed products as discontinued items; hence the focus on organic numbers. Sage's worldwide revenue was $1.12 billion, a rise of 5 percent from a year earlier, up 3 percent organically. EBIDTA was $301.6 organically. "North America has delivered good growth in its business," chief executive Guy Berruyer. The company pointed to growth in X3, Sage 50 in the United States and in Canada and in integrated payments. With Sage noting a 7-percent increase in recurring revenue and a 3-percent decline in software and related service revenue, both organically, in North America that suggests license sales for products like Sage 100, 300 and 500 must have gone down. While growth of X3 was still below what Berruyer would like, it rose by 8 percent, compared to 5-percent growth for last year's corresponding period. Sage also reported 12,000 customers adopted integrated payments , up 18 percent 9,700 number a year ago. The number of paying customers for Sage One was 11,500, compared to 6,190 in the first half of 2012.
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