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
“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.
Luminant, which provides technology-enabled business services said it stands
by comments made in a March 22, 2001 press release and conference call. The
company credited a shift from Web site development to other tech based
services six-months ago as its saving grace.
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.