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Rare Medium Gives Q4 Results, CFO Departs

The chief financial officer of interactive services and incubator firm Rare Medium Group has resigned, the company announced during its earnings results Wednesday evening.

During a conference call to discuss the earnings, company officials said Jeff Kaplan was leaving to pursue other business opportunities.

Craig Chesser, vice president of finance and treasurer, and Michael Hultberg, vice president and controller, are slated to take on the responsibilities of the position, in addition to their current duties.

One of Kaplan's last acts as Rare's CFO was to highlight the earnings of the company's Internet services division, which lacked some key details regarding bottom-line results.

Kaplan said that for the fourth quarter ended Dec. 31 of 2000, Rare Medium grew purported revenue from its Internet services division to $33.7 million, a 98 percent jump over the $17 million in revenues during the same period in 1999.

Calls for more details on bottom-line net income were not returned by press time and were not available in the company's current public filings.

For the quarter, it reported earnings of $0.06 per share before interest, depreciation and other charges. For the full year, the company said the division took in $121 million and announced $0.10 earnings per share on a cash basis.

The parent company's results were actually lower because the cost of maintaining investments in portfolio companies and its incubator activities had to come off the results, according to accounting rules. The book value of the Rare's venture portfolio was listed at $48 million, which includes $7.8 million in securities. The balance was private investment activity.

With the non-cash revenues from its portfolio companies out of the accounting picture, Rare Medium Group reported a net loss to shareholders of $46.1 million, or $0.73 per share, on revenues of $29.2 million for the fourth quarter that ended Dec. 31, 2000. The results compared to a net loss of $29.5 million, or $0.73 per share, on revenues of $17.6 million during the same period in 1999.

Its cash on hand as of the end of the year was $157 million.

For the full year, the venture investment, incubator and Internet consulting company lost $147.5 million, or $2.76 per share, on revenues of $110.1 million. In the full year 1999, Rare Medium Group lost $93.2 million, or $2.55 per share, on revenues of $36.7 million.

During a conference call Wednesday evening, Rare's CEO Glenn Meyers said he didn't see the pure play services sector getting better in the current downturn for interactive services. "There is a second half story out there," he added. But said more cost cutting measures would continue as the division weathers a pullback in corporate spending on Web projects.

"We've been conserving cash, cutting overhead, consolidating facilities" and leveraging all of our relationships," Meyers added.

As for billable employees, the firm reduced that headcount by 99 from third quarter of 2000 to fourth quarter.

In Thursday's early session, shares of Rare Medium were trading at around $2.94, up by about $0.63 from Wednesday's close.

Erin Joyce is managing editor at atNewYork, an internet.com publication.