Reeling from a management restructuring, New York City-based K2 Design Inc. posted a net loss for the fourth quarter ending Dec. 31 of $1.46 million, or 43 cents per share, compared with a net loss of $307,066, or eight cents a share in the same period a year earlier.
Fourth quarter, revenues were $483,088, compared with $3.11 million in the fourth quarter of 1997. Decreased sales and a one-time severance charge of $400,000 contributed to the fourth quarter loss, the company said.
For the year, revenues were $6.42 million, compared with $7.50 million in 1997. Net income was $1.23 million, or 35 cents per share, compared with a net loss of $1.70 million or 46 cents per share, in 1997. Net income in 1998 is principally the result of a $2.99 million gain from the sale of discontinued operations.
“As anticipated, our management restructuring impacted revenues and earnings in the second half of 1998,” said Matthew de Ganon, executive chairman of K2 Design. “However, the changes have positioned K2 for growth in our core specialty of developing online businesses, sales and marketing strategies. This has already proven successful, since over the past six months, K2 Design has landed several new accounts. The outlook for 1999 is very encouraging.”
In October, Lynn Fantom joined the company as president and CEO. Fantom was previously an officer of several companies owned by the Interpublic Group and served as chief executive officer of Interpublic subsidiary Lowe Direct.
David Centner, the former chairman, CEO and co-founder of K2 Design Inc., left the company in September 1998.
Recent new K2 clients include NCR Corp., the Puerto Rico Convention Bureau, USAccess Bank and VarsityBooks.com.
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