AnswerThink to reduce exposure to Internet clients, assignments

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AnswerThink, a Miami technology consulting company, announced it is taking steps to significantly reduce its exposure to dot-com and Internet-related clients and projects, and will reduce the staff dedicated to those initiatives as well.

The company, which did not disclose the number of staff cuts, said fourth-quarter earnings and revenues will fall below expectations: 4Q revenues are now expected to be $68 million to $70 million with earnings to be between break-even and $1 million before goodwill amortization, stock-based compensation and nonrecurring items are added in. One of those nonrecurring items is an after tax charge of about $7.5 million which the company said is primarily for costs relating to staff reductions for personnel dedicated to dot-com initiatives and an increase in debt reserves. Reported net income, including the dot-com related charges, for the fourth quarter is expected to be a loss of between $7.5 million and $8.5 million. "While dot-coms have historically represented less than 15 percent of our business, the diminished demand for these type of projects impacted our fourth quarter results," said Ted A. Fernandez, AnswerThink chairman-CEO. "We felt that it was important to quickly deal with our exposure related to these dot-com projects." On Dec. 20, shares of AnswerThink closed down $1.02 at $2.98, its lowest price ever; at its peak, the stock commanded a price of $40.38.

Copyright December 2000, Crain Communications Inc.

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