Luminant Confident, Boasts 2001 Profitability
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Keenly aware that other players in the Internet's shrinking arena have dove-tailed into obscurity, Luminant Worldwide Corp. has attempted to quell shareholder fears by confirming an earlier announcement that it expects to be profitable in the first quarter of 2001.
"In the days since our recent earnings press release and conference call, many competitors have reported news of continuing layoffs, reorganizations and financial restructuring.
With the instability in the market and our sector in particular, we thought it was important to let our investors and clients know that we remain confident in our progress," said Jim Corey, president and chief executive officer of the Dallas-based technology firm.
"We took early actions and are not experiencing the problems that continue to plague many of our competitors," he added.
At the time, the company reported fourth quarter revenue was $22.8 million, compared to $30.1 million in revenue for the same period in 1999. The company reported a cash operating loss, before non-cash and restructuring charges and after the application of an assumed 40 percent effective tax rate, of approximately $13.3 million, or $0.49 per share, compared to net income, before non-cash charges, of approximately $1.7 million, or $0.07 per share for the fourth quarter of 1999.
This morning, Luminant also announced the completion of an annual review of the bank loan covenants of its $15 million credit facility with Wells Fargo Business Credit Inc. The line of credit extends through March 31, 2003.
Tom Bevivino, chief financial officer, said "The newly established loan covenants provide the company with increased flexibility. Together with our cash balances and anticipated positive cash flow, Luminant has adequate funding for capital needs throughout this year and into 2002."
In the last year, competitors in the Web consulting space, including Philadelphia-based USInteractive and Chicago-based Xpedior filed for bankruptcy. To forgo the same fate, Luminant's director of investor relations, Mark Johnson, said the company acted quickly.
"Competitors failed to recognize the reality of an unforgiving, downward spiraling Internet market. Lots of firms thought it was a temporary glitch, with just a few layoffs. We responded quickly by shifting focus," he said.
And as with many companies facing dire financial straits, changes started from the ground up. A year ago, Luminant cut its staff of 1,200 by 24 percent. The company also switched from a heavy concentration on Web design to consulting on supply chain products.
In early morning going, Luminant shares
were trading at 64 cents, up 13 cents from yesterday's close at 51 cents.