From CRN.com:
crn.com
Inforte Earns Slight Profit, Cost-Cutting Under
Way
By Marie Lingblom, CRN
Boston
11:59 AM EST Fri., July 13, 2001
Inforte managed to maintain a slight profit for
its second quarter and hopes to avoid losses
in upcoming quarters by calling for the
voluntary resignation or leave of absence of
90 employees.
The e-services company, based here, reported
revenue for the quarter ended June 30 was
$12.5 million, or 1 cent per diluted share. First
Call estimates called for a break-even quarter.
That compares with revenue of $16.4 million,
or 15 cents per share, for the second quarter
of 2000.
"We are continuing to win projects," Inforte
CEO Phil Bligh told investors during a
conference call Friday morning. "Obviously,
customers are continuing to spend some
amount of money but the wins are not
replenishing the streams that are ending."
Bligh cited the economic slowdown as the
"single reason for the decline in revenue." In
response to the slowdown and in an effort to
generate break-even or positive earnings, 90
employees--mostly junior-level
consultants--were targeted and accepted an
offer to take a leave or resign, he said.
Individuals selecting the leave of absence will depart Friday and will
receive compensation of between 20 percent and 25 percent of regular
pay if they remain available to return to full-time service. Individuals
choosing the voluntary resignation package will receive pay through the
end of August.
Bligh said employees have been told openly during the past month or so
about the state of the business and the economic environment. The
voluntary resignation or leave of absence program, he said, was
discussed so everyone involved was aware well ahead of time.
Bligh told investors the move was necessary to remain cash-flow
positive. The program will leave Inforte with about 300 employees at the
end of the third quarter.
As of June 30, Inforte reported $85.3 million in cash. Looking ahead,
executives predicted $10 million in revenue per quarter, and 0 cents per
share in earnings, until current trends change.
"We expect and will manage the business to break-even, period, until
there are clear signs of a sustained definite turn in the economy and a
sustained increase in information technology spending," Inforte CFO Nick
Blodgett told investors.
Still, Blodgett said Inforte expects full year 2001 results for revenue and
earnings per share share to be $46.6 million and 8 cents, respectively.
Bligh told investors no one really knows when this environment will
substantially improve.
"There was a consensus it would turn at the midpoint of the year," Bligh
said. "That has changed to Q4, and that has changed to the first quarter
of next year. No one is saying, 'Soon.' " |
