LV tech firm posts big loss

Wednesday, March 27, 2002 | 11:08 a.m.

PurchasePro reported its second straight quarter of heavy losses this morning, but the company repeated its assertion that it is on target to turn cash flow positive this year.

The Las Vegas-based e-commerce company reported a loss of $71.3 million, or 98 cents per share, for the quarter ended Dec. 31. This compared to a loss of $36.8 million, or 55 cents per share, in the year-ago period. Revenues fell 93 percent to $2.4 million.

PurchasePro stock fell 10 cents to 69 cents this morning.

Though revenues were down from the third quarter's $3.6 million, the company's bottom line was improved over the net loss of $106.4 million it posted in the quarter ending Sept. 30. PurchasePro lost $272.2 million for all of 2001 on revenues of $38.8 million, compared to a loss of $72.8 million on revenues of $65 million in 2000.

Of the $71.3 million fourth-quarter net loss, $48.8 million came from special charges, PurchasePro said. These included write-downs and write offs of "certain property and equipment, intangibles, investments and lease termination costs." Charges were also taken from layoffs, the company said.

The biggest cut in revenues came in software licenses. PurchasePro posted just $524,000 in software license revenue on the quarter, down from $22 million in the year-ago period.

"The fourth quarter was disappointing from a revenue level, but it's a trough," said Richard Clemmer, chief executive. "We feel very good about our ability to grow from there."

First quarter revenue should show "good improvement" over the fourth quarter, Clemmer said, based on the number of contracts PurchasePro has signed so far in the quarter.

Clemmer repeated his prediction that PurchasePro would post a profit by the spring by the measurement of "EBITDA" -- earnings before interest, taxes, depreciation and amortization. The company should begin generating cash by fall, he said.

"We've taken every possible business and financial action to be in that position," Clemmer said.

One investor asked on a conference call this morning whether PurchasePro would be able to survive. Clemmer said he was confident it would, noting the company had recently received a $6 million equity infusion and secured a commitment from another investor to purchase up to $15 million in PurchasePro stock at the company's request.

"I don't have a significant concern about this company's viability," Clemmer said. "We think the capital structure is very adequate to transition through this time."