Troubled ASP pioneer FutureLink Corp.
, once a standard-bearer for the emerging ASP industry, announced Tuesday that the company and its U.S. subsidiaries have filed for Chapter 11 Bankruptcy protection.
Lake Forest, Calif.-based FutureLink filed voluntary petitions for relief with the U.S. Bankruptcy Court for the Southern District of New York. The bankruptcy filings exclude the company’s Canadian and United Kingdom operations, none of which seek Chapter 11 protection or have commenced insolvency proceedings.
The company was hard-hit by the changing economic climate, and has been struggling to turn itself around for months. In January, FutureLink announced an 8-percent staff reduction and a re-emphasis on its professional services business.
In March, the company reported a fourth quarter net loss of $205.1 million ($2.92 per share) on revenue on $34.1 million, and said it would step back from the ASP market in the U.S.
At that time, FutureLink President and CEO Howard E. Taylor also reported that the company’s current cash position would not carry it through 2001. “Additional actions are needed to reach profitability. We need to reduce operating capital needs and raise capital,” said Taylor. The steps may include eliminating unprofitable lines of business and selling one or more business lines or divisions.
In April, FutureLink announced more cost-cutting measures: a 5-percent workforce reduction, consolidation of its U.S. datacenters, and an expense control plan expected to save the company $7 million this year.
In June, stockholders approved a one-for-seven reverse stock split required to avoid Nasdaq delisting. Later that month, Philip R. Ladouceur resigned as chairman of the board of directors, a post he held since August 1999, to join Toronto-based VC fund MM Venture Partners.
July saw the company shopping around its UK operations, acquired in November 1999 when it acquired KNS Distribution Ltd., a server-based computing and enterprise connectivity solutions distributor, and subsequently launched its application service provider business through FutureLink Europe Ltd.
For an analysis of FutureLink’s fatal flaws, see this April 2 analysis by ASPnews.com’s Phil Wainewright.
Shares of FutureLink were down to $0.33 Wednesday morning, from a 52-week high of $45.50, and an all-time high of over $250 in March 2000. Trading was halted on Tuesday pending the announcement, and on Wednesday morning, Nasdaq changed its trading status to “additional information requested,” meaning trading cannot resume until the request for information is satisfied.