A Very Good Quarter

The results are rolling in and the winners are: Any accounting resellers and vendors who were still in business to tally their numbers for the December quarter.

By all accounts, the abysmal business that affected the market for much of the last two years vanished in a flurry of pent-up demand as those vendors for whom numbers are available racked up double-digit increases.

Revenue for Microsoft Business Solutions was up 40 percent, probably a result of a change in its maintenance plan, which resulted in a 60 percent increase in rates to many Navision users. But beyond that, it’s clear that Navision and other mid-market sales were hot.

Sales for Accpac International rose to $29 million for the quarter, up 20.8 percent from $24 million a year earlier. Epicor revenue increased by 25 percent as new license fees moved up. The overseas companies, Sage and Exact Software, are on a different schedule. Sage reports half-year results for the period ending in March, but has given decent numbers for its year ended September 30, and Exact tells the tale of its year ended December 30 in a couple of weeks.

The MBS reseller channel is doing well. There are many reports of VARs with increases of greater than 20 percent. In the case of Navision, resellers are doing well, but given the choices for getting customers on maintenance, much of that one-time revenue hit went to Microsoft, not to the channel.

There’s not a lot of detail on the Accpac numbers, which are being released by Computer Associates International, as it reports Accpac as a discontinued operation in preparation for Accpac’s sale to Best Software. Still, CA expected Accpac sales to hit $105 million for the year ending March 31, an increase of 8.4 percent from $88.7 million for fiscal 2003.

For Epicor, the increase in license fees was good news, because over the last three years they had been declining. New software sales rose by 23 percent in the fourth quarter. That category was up by only 13 percent for the year, which demonstrates the year-end acceleration.

The big thing, of course, is profits. Accpac had a $1 million profit for the nine months and is expected to have about the same for the full year. But that’s an improvement from the losses of the first two quarters. Similarly, Epicor registered quarterly earnings of $3.5 million, a rebound from a loss of $2.1 million. MBS has not reported its divisional results, but previous statements are that it will not be profitable until fiscal 2005.

The reason for the improvements? The previously mentioned pent-up demand was a big factor. A lot of companies that needed to replace systems had been sitting on the sidelines while the economy was weak. They came back in a big way. For Accpac, its eCRM product has consistently been touted as a big seller by president David Hood, although CA doesn’t break out results that finely.

Epicor was helped by its purchase of ROI Systems, but it also pointed to the success of new products and the addition of 400 customers through organic growth.

So, there are a lot more smiles around the business than there have been for some time. It’s nice to see the change.