The company said that weak economic conditions and customers delaying purchasing decisions on larger deals were among the factors affecting first quarter performance.
The net loss on a pro forma basis for the first quarter of 2001 was $7.4 million as compared with net income of $.988 million for the first quarter of 2000. Net loss per share, on a pro forma basis, was $0.25 for the first quarter of 2001 versus net income per share of $0.03 for the prior first quarter.
Mercator also announced today that the company intends to reduce its workforce by at least 20 percent no later than April 30.
As part of a strategic reorganization and restructuring plan, we are reducing our workforce in order to lower our costs and to strengthen Mercator for the long term, said Roy King, president, chief executive officer and chairman of the company. These headcount reductions are part of a new business model that will allow us to streamline our business and help us meet our profitability objectives.
King added, A significant portion of these cuts was determined by the results of an exhaustive business analysis and strategic-planning process that has been underway for the last three months at Mercator. Out of this process, which will be completed shortly, will come a detailed strategic plan for taking Mercator forward. The key elements of the plan will be announced in a press release on April 30. Details of the plan will be discussed in a conference call on May 1.
During the first quarter EMEA met its growth targets, up over the prior period, and Asia Pacific, despite a very weakened economy, performed well. Worldwide revenue from the financial services and healthcare sectors once again represented a significant portion of total revenue during the quarter. However, U.S.-based customers delaying purchasing decisions on larger license sales impacted first quarter revenue.
Total operating expenses declined sequentially by $3.6 million or 11%to $30.6 million, excluding amortization of intangibles and the intangibles impairment charges. Included in that number are approximately $2.0 million of incremental charges related to consultants, legal fees, recruiting, and separation costs.
The company reaffirmed its commitment to return to profitability by the fourth quarter. The previously discussed reduction in force, as well as actions to be taken to derive additional increased efficiency, are expected to reduce the company’s burn rate and positively impact profit levels for the year.
SOURCE: COMPANY PRESS RELEASE
