K2 Digital Hits Breakeven Q4
Company officials said the "shaky" state of the Internet services sector was part of the year-end results, but that its focus on Fortune 1000 clients was helping to minimize the firm's exposure to the downturn.
Interactive design and marketing shop K2 Digital essentially broke even for the fourth quarter of 2000, with executives
Net income for the quarter was $8,381, on revenues of just under $2 million.
The results compared to net income of $376,880 (or $0.11 per share) on revenues of $1.3 million during the fourth quarter of 1999.
Revenues were up 43 percent between the two quarters and up 71 percent from the third quarter, when the firm posted a net loss of $697,000.
For 2000, K2 Digital ended with a net loss of $1.9 million, compared to a $749,647 profit during full year 1999.
Net revenues were $5.2 million, up 39 percent compared to 1999 net revenues of $3.7 million. Cash and cash equivalents as of the end of December were $735,606.
During a conference call to discuss the results, the company said the “shaky” state of the Internet services sector was affecting the market, but that its client base in the traditional world and its focus on Fortune 1000 clients helped to minimize the firm’s exposure.
Lynn Fantom, president and chief executive officer, said the company was pleased with the growth in net revenue for the year and with the positive earnings before interest taxes, depreciation and amortization charges. Given the overall weakness in the Internet services sector, the company was also satisfied with the breakeven results.
During the past year, the firm’s average engagement size more than doubled, said Fantom. Plus, the company’s business model has evolved from one-off projects to ongoing relationships with recurring revenues such as Morgan Stanley, Bristol-Myers Squibb, and software firm AP Engines.
The company also obtained a $12 million equity commitment from Fusion Capital Fund II, of Chicago during the fourth quarter.
Shares of K2 closed at $0.94 Wednesday, just below the previous day’s close of $1.
It is certainly a very challenging time, said Gary Brown, chief operating officer, during Tuesday’s conference call.
“But our company continues to press ahead,” he said. “We have the right group of people and the right approach to survive this very difficult time in the market and we thank our investors for sticking by us. We hope better times are ahead.”
