Harbinger Corp has announced restructuring actions and warned of poor third-quarter results. The Atlanta-based e-commerce software provider said it would be cutting its staff by 110 people, or 10% of the total workforce, as well as shaking up its executive team. The company said the headcount reduction is mostly related to inefficiencies in its US and European operations as it completes the integration of acquisitions – two and counting this year, after five last year – and reduces duplicate functions. On the executive side, Harbinger founder and chairman Tycho Howle will take over as chief executive, replacing David Leach who will become vice chairman and will concentrate on the company’s international business. Also, James Travers has been promoted to president and chief operating officer and will be responsible for day-to-day operations of the company. The restructuring comes as the company moves to focus on it current product lines and shifts its core business from electronic data interchange (EDI) to internet-based electronic commerce. It says EDI will remain a significant part of its business for the time being, although its growth will grind to a halt. As far as the third quarter goes, Harbinger said it expects to report revenues of between $34m and $36.5m and earnings per share from continuing operations of between $.04 and $.08, before one-time items. Those items include restructuring charges of $15m-$20m and a $6m provision for doubtful accounts receivable associated with indirect channels. In addition to those charges, the company expects to record a loss associated with discontinuing the TrustedLink Procurement application of between $3m and $6m. The company will likely post a net loss somewhere upwards of $0.20 per share, when Wall Street had been expecting net income for the quarter of $0.11 per share. With regard to future strategy, the company said significant investment areas going forward will include electronic catalog supplier content, next generation e-commerce technologies, enhanced software for secure internet messaging and the company’s Internet Value-Added Server both as a service and technology for licensing. A key focus of the company in the coming years will be business-to-business electronic connectivity through the internet. Services that Harbinger looks to concentrate on are trading community management, mass deployment, the professional services needed to implement e-commerce, and the software necessary to enable transactions. The company wants to cater to all size businesses and hopes to adopt a solutions-driven approach with the goal of achieving a more predictable revenue stream – with 50% from recurring services, 30% from software and 20% from professional services. Harbinger shares plunged $3 Thursday, or 41%, to close at $7.25.
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