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September 21, 1998

THINK NEW IDEAS WARNS OF POOR START TO 1999

By CBR Staff Writer

Think New Ideas Inc, Los Angeles-based internet and intranet systems developer, is warning that revenue for the first quarter, while expected to show growth of about 70% year-over-year, will be lower than it had anticipated – coming in at between $11.7m and $12.2m. The revenue shortfall, coupled with higher expenses, should result in an EBITDA (earnings before interest, tax, depreciation and amortization) loss of $500,000 to $900,000, including a $300,000 one-time charge stemming from earlier acquisitions. The projected loss amounts to $0.05 – $0.09 per share, when analysts were expecting net income of $0.06. The company is blaming delays in sales, budgeting and approval cycles at some of its key clients, especially in the final month of the quarter, and says the delays are largely an effect of current instability in world financial markets. It claims to have a healthy backlog of business, though, and indicates that the problems shouldn’t reach beyond the current quarter, which ends September 30. Think New Ideas’ stock fell $1.75 to $6.75 on the news, a drop of 20.6%.

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