NURUN Announces First Quarter 2001 Results
MONTREAL, QUEBEC--APRIL 23, 2001 - 13:44 EDT
NURUN Inc., a subsidiary of Quebecor Inc. Group,
today released its financial results for the three months ended
March 31, 2001. Revenues for the period totaled $40.1 million, an
increase of 78% over the first quarter in 2000. Earnings before
interest, taxes, depreciation and amortization (EBITDA) for the
quarter stood at a loss of $0.4 million, compared to a $1.3
million profit during the first quarter last year. The Company's
net loss (after amortization of goodwill and deferred
compensation) for the first quarter 2001 was $7.6 million, or
$0.23 per share, compared to a net loss of $10.6 million, or $0.36
per share, for the corresponding period in 2000, and a net loss of
$92.1 million, or $2.86 per share, for the fourth quarter 2000.
The first quarter 2000 results have been restated to reflect the
company's revised method of accounting for business acquisitions
that was implemented during the fourth quarter 2000.
The first quarter 2001 results include a $1.5 million gain on
dilution resulting from the initial public share offering of NURUN
Inc.'s subsidiary, Mindready Solutions, Inc. (TSE: MNY),
attributed to the underwriter's exercise of their over allotment
option.
Effective last quarter, the Company began separately reporting the
results for each of its two distinct operating segments:
e-Business Services and Test Engineering Solutions (Mindready
Solutions, Inc. or Mindready). For the quarter ended March 31,
2001, NURUN's e-Business Service segment reported revenues of
$18.7 million, representing increases of 1.8% and 0.5% over the
first quarter 2000 and fourth quarter 2000, respectively. The
current quarter's e-Business Services EBITDA loss was $2.4 million
versus a $0.4 million gain for the corresponding period last year,
and versus a $7.8 million EBITDA loss for the fourth quarter ended
December 31, 2000.
The Test Engineering Solutions segment, or Mindready, reported
revenues and EBITDA of $21.5 million and $2.0 million,
respectively, for the quarter ended March 31, 2001.
Recent Customer Contracts
During the first quarter the Company's e-Business Services segment
won or renewed a number of multinational accounts, including
General Motors in Detroit, units of PPR (Pinault-Printemps-La
Redoute) Group in Paris, MTV and Galbani (Danone Group) in Italy.
NURUN continued to successfully leverage its long-term customer
relationships, and extend its international brand, as evidenced by
new contracts awarded by L'Oreal to the NURUN Madrid, NURUN Milan
and NURUN Montreal offices. Additional local office customer wins
included Kerastase (a L'Oreal brand), RTL (the leading French
Radio broadcaster), BNP Bank, Credit Commercial of France and
Canal+ in Paris; Hadassah and Dannon Water in New York; Cambridge
Shopping Centers and Cooperators in Toronto; Videotron and
Pleasant Holidays in Montreal; and several governmental contracts
in Quebec City.
Also during the quarter NURUN officially opened its new offices in
London, Detroit and a sales office in Rome at the request of
several international or national customers.
e-Business Services Sector Slowdown
Despite the recent customer successes, the company's growth
prospects are now being impacted by the economic uncertainty and
slowdown in North America and, in particular, the e-Business
sector adjustment. During March, the company was informed by some
of its clients that previously approved web projects will be
postponed and even cancelled, e-marketing budgets have been
reduced, or advertising spending has been cut. As a result, in
general, NURUN's recent project proposals and new business deals
are taking a much longer time to close. Also, the slowdown is
beginning to affect the European e-Business market.
Status of Restructuring Plan
Earlier during the first quarter 2001, the Company announced a
major restructuring plan designed to drive its e-Business Services
business in the most profitable direction. The major elements of
the plan are as follows:
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* Rationalization of NURUN's business portfolio
* Harmonization of businesses processes
* Cost Reduction
* Implementation of additional management controls
* Sales channel development (multinational accounts and Quebecor
World focus)
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In addition to the actions previously announced and summarized
above, during April 2001, the Company decided to repurpose its
Ottawa facility. Necessitated by a shift in local market demand,
all production activities currently underway-in Ottawa will be
transferred to NURUN's Toronto facility. The Ottawa office will
remain open as a sales and business development facility.
Approximately 15 production personnel will either be redeployed to
Toronto or their positions eliminated.
NURUN Inc.
NURUN Inc. (Toronto Stock Exchange: IFN), a subsidiary of the
Quebecor Inc. group, is a leading global network developing
e-business strategies designed to support multi-channel sales and
marketing activities for select clients in the "click and mortar"
environment. NURUN employs more than 1,200 professionals in 19
major cities worldwide. More information about NURUN can be found
at www.NURUN.com.
Forward-Looking Statements
Except for historical information contained herein, the statements
in this document are forward-looking and made pursuant to the safe
harbor provisions of the Private Securities Reform Litigation Act
of 1995. Forward-looking statements involve known and unknown
risks and uncertainties, which may cause our actual results in
future periods to differ materially from forecasted results.
Those risks include, among others, changes in customer demand for
our services, changes in labor and equipment costs and
availability, seasonal changes in customer orders, pricing actions
by our competitors and general changes in economic conditions. |
