Charles Phillips, InforInfor executives ended fiscal 2013 very happy with their new product direction and promising to spend more on their software lines. That comment should address concerns I've heard that Infor is just mining the companies it bought. Still the company has a lot of work to do as interest expense remains a drag on earnings, although it has been refinancing and cutting that cost.

For the year ended March 31, the loss fell to $76.2 million, down from $310 million in red ink for fiscal 2012. Revenue for the most recently ended year was $2.72 billion, up 8.5 percent from $2.54 billion the prior year. Infor spent the year making elements its product line look and work alike, based on its Ion architecture. In an earnings call, CEO Charles Phillips said the company didn't publicize the new products as much as it could have, choosing to let customers see for themselves at last month's Inforum conference. "We didn't say a lot until we had innovated and modernized products," Phillips said. Still, it was the change in interest expense that had one of the biggest impacts on the P&L. That cost fell to $418.1 million last year, down from $467.4 million for 2012. Operating costs were also trimmed, despite R&D costs rising to 12.7 percent of revenue for 2013, up from 12.3 percent. And Phillips said spending in that area would rise again this year. Infor was able to achieve increased investment in R&D while cutting overall costs by reducing G&A spending and deploying money. R&D expenses were $351.9 million last year, up from $322.3 the prior year. In his explanation of revenue sources, Phillips said ERP revenue rose by 5 percent while most competitors saw decreases. Last year was a light in terms of M&A for Infor, which spent $119.7 million on five purchases. Phillips said the company would likely buy businesses to fill out vertical lines, which he termed building the "last mile that competitors tend to leave to third parties ..."

Last modified on Friday, 11 October 2013
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Bob Scott

Bob Scott has been informing and entertaining the mid-market financial software community with his email newsletters for 10 years. And he has been covering this market through print publications for 18 years, first as technology editor of Accounting Today and then as the Editor of Accounting Technology from 1997 through 2009. He has covered the traditional tax and accounting profession during the same time and continues to address that as executive editor of the Progressive Accountant.

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