Memphis-based IT services company, SCB Computer Technology Inc on Friday reported a net profit of $4.4m for fiscal 1999, down 41.5% on the previous year’s figures after it wrote off $6.3m in one-time charges and losses from discontinued operations.

Before the charges, Earnings per share for the year were $0.43, a penny above Wall Street expectations, but the extraordinary items brought the figure down to $0.18, compared to $0.33 last year.

SCB absorbed costs amounting to $0.10 per share from closing down its Scottsdale, Arizona-based server bureau after a 300% license fee hike on its Unisys A17 mainframes at the facility made it unprofitable. It lost $750,000 in the last two quarters of the year after Unisys changed its A17 pricing structure when it launched a new generation of mainframes, dubbed Clearpath, last year.

The company also lost $0.10 per share settling a billing dispute with the Tennessee Valley Authority (TVA). SCB paid compensation in August 1998 after regulatory authorities found it had overcharged the TVA under an $8.4m consulting contract with the federal agency. Also arising out of this debacle were severance payments to ex-chief operating officer, Steve White, who had presided over the account – adding another $0.02 loss per share.

Total costs arising from the TVA affair were $1m, chief financial officer, Gary McCarter told ComputerWire. McCarter said the datacenter write-off arose from a rationalization of the firm’s business and the TVA expenses were a one-time event.

SCB’s focus next year will be on providing enterprise management services. It struck a deal with Computer Associates International Inc last month to license the company’s Unicenter TNG system and network management software for its remote IT management centers in Phoenix, Nashville, Dallas and Memphis.

SCB signed multi-year contracts in fiscal 1999 providing for more than $120m in revenue and now has a client base of over 250 organizations, specializing in the state and local government arena. It sunk $1.1m into training and development, an investment it hopes will cut staff turnover.

Ben Bryant, SCB president and CEO, said the company was successfully moving from existing Y2K-related work to contracts with longer-term earning opportunities.