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(April 24, 2001) -- Online loyalty marketing company Netcentives, San Francisco, reported total net losses of $41.6 million on $17 million in revenue for the first quarter, a 217.9% increase over net losses of $13 million in the same period last year and a 268% rise over revenues of $4.6 million.

Net losses for the quarter excluding non-cash charges were $13.2 million, up from $9.4 million in the year earlier period.

Earlier this month, Netcentives reduced 2001 revenue expectations to $65 million to $70 million, from $85 million to $90 million, and initiated cost-cutting measures to improve earnings-per-share expectations. At that time, the company laid off 120 people across the board -- about 20% of its workforce -- and reduced discretionary spending including contract labor, marketing and administrative and travel costs.

"There are early signs that our aggressvie cost-cutting measures are working," said Netcentives President-CEO Eric Larsen in a call to investors after the market closed today. He reiterated previous expectations to break even on cash flow from operations in the fourth quarter, and he said he projected positive cash flow on a monthly basis beginning in the third quarter as a result of new-business activity and cost-cutting efforts.

Netcentives stock closed at 89 cents today, down deeply from its 52-week high of $20, which it reached last summer. -- Cara Beardi

Copyright April 2001, Crain Communications Inc.

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