Edgewater Suffers 1Q Net Loss of $13.9 Million

Edgewater Technology Inc. of Wakefield, Mass., formerly part of StaffMark Inc. of Fayetteville, reported a net loss of $13.9 million for the first quarter of its fiscal year, which ended March 31. That’s a 397 percent decline from a net profit of $4.7 million for the same quarter of the previous year.

Net loss from continuing operations was $1.5 million, a decline of 318 percent from a loss of $670,000 for the comparable quarter of 2001.

Revenue was $4.6 million, a 41 percent drop from $7.8 million in the first quarter of the previous year.

“During the early stages of our first quarter 2002, we experienced soft sales and continued delays in client spending, resulting in reduced utilization and billable hours,” Shirley Singleton, president and CEO of Edgewater, said in a press release. “Reacting to this early trend, we made a decision to reduce expenses by rightsizing our work force and to further concentrate efforts on team selling through our blended sales model …

“We expect, based on current information, that our revenues will be flat to slightly higher in the second quarter. We also believe it is important to recognize that the company signed eight new clients in the first quarter, compared to a total of seventeen new clients during all of 2001.”

In February, Edgewater announced that it would lay off 38 employees, which was about 19 percent of its work force.

Singleton said the workforce reduction will save Edgewater about $700,000 per quarter beginning in the second quarter of this year. She said the company recorded a one-time charge of about $350,000 in the first quarter of 2002 related to severance pay and related costs.

The press release said Edgewater also recorded a non-cash, goodwill impairment charge of $12.5 million because of accounting changes in the first quarter of 2002.

Edgewater Technology Inc. of Wakefield, Mass., formerly part of StaffMark Inc. of Fayetteville, reported a net loss of $13.9 million for the first quarter of its fiscal year, which ended March 31. That’s a 397 percent decline from a net profit of $4.7 million for the same quarter of the previous year.

Net loss from continuing operations was $1.5 million, a decline of 318 percent from a loss of $670,000 for the comparable quarter of 2001.

Revenue was $4.6 million, a 41 percent drop from $7.8 million in the first quarter of the previous year.

“During the early stages of our first quarter 2002, we experienced soft sales and continued delays in client spending, resulting in reduced utilization and billable hours,” Shirley Singleton, president and CEO of Edgewater, said in a press release. “Reacting to this early trend, we made a decision to reduce expenses by rightsizing our work force and to further concentrate efforts on team selling through our blended sales model …

“We expect, based on current information, that our revenues will be flat to slightly higher in the second quarter. We also believe it is important to recognize that the company signed eight new clients in the first quarter, compared to a total of seventeen new clients during all of 2001.”

In February, Edgewater announced that it would lay off 38 employees, which was about 19 percent of its work force.

Singleton said the workforce reduction will save Edgewater about $700,000 per quarter beginning in the second quarter of this year. She said the company recorded a one-time charge of about $350,000 in the first quarter of 2002 related to severance pay and related costs.

The press release said Edgewater also recorded a non-cash, goodwill impairment charge of $12.5 million because of accounting changes in the first quarter of 2002.

Edgewater Technology Inc. of Wakefield, Mass., formerly part of StaffMark Inc. of Fayetteville, reported a net loss of $13.9 million for the first quarter of its fiscal year, which ended March 31. That’s a 397 percent decline from a net profit of $4.7 million for the same quarter of the previous year.

Net loss from continuing operations was $1.5 million, a decline of 318 percent from a loss of $670,000 for the comparable quarter of 2001.

Revenue was $4.6 million, a 41 percent drop from $7.8 million in the first quarter of the previous year.

“During the early stages of our first quarter 2002, we experienced soft sales and continued delays in client spending, resulting in reduced utilization and billable hours,” Shirley Singleton, president and CEO of Edgewater, said in a press release. “Reacting to this early trend, we made a decision to reduce expenses by rightsizing our work force and to further concentrate efforts on team selling through our blended sales model …

“We expect, based on current information, that our revenues will be flat to slightly higher in the second quarter. We also believe it is important to recognize that the company signed eight new clients in the first quarter, compared to a total of seventeen new clients during all of 2001.”

In February, Edgewater announced that it would lay off 38 employees, which was about 19 percent of its work force.

Singleton said the workforce reduction will save Edgewater about $700,000 per quarter beginning in the second quarter of this year. She said the company recorded a one-time charge of about $350,000 in the first quarter of 2002 related to severance pay and related costs.

The press release said Edgewater also recorded a non-cash, goodwill impairment charge of $12.5 million because of accounting changes in the first quarter of 2002.

Edgewater Technology Inc. of Wakefield, Mass., formerly part of StaffMark Inc. of Fayetteville, reported a net loss of $13.9 million for the first quarter of its fiscal year, which ended March 31. That’s a 397 percent decline from a net profit of $4.7 million for the same quarter of the previous year.

Net loss from continuing operations was $1.5 million, a decline of 318 percent from a loss of $670,000 for the comparable quarter of 2001.

Revenue was $4.6 million, a 41 percent drop from $7.8 million in the first quarter of the previous year.

“During the early stages of our first quarter 2002, we experienced soft sales and continued delays in client spending, resulting in reduced utilization and billable hours,” Shirley Singleton, president and CEO of Edgewater, said in a press release. “Reacting to this early trend, we made a decision to reduce expenses by rightsizing our work force and to further concentrate efforts on team selling through our blended sales model …

“We expect, based on current information, that our revenues will be flat to slightly higher in the second quarter. We also believe it is important to recognize that the company signed eight new clients in the first quarter, compared to a total of seventeen new clients during all of 2001.”

In February, Edgewater announced that it would lay off 38 employees, which was about 19 percent of its work force.

Singleton said the workforce reduction will save Edgewater about $700,000 per quarter beginning in the second quarter of this year. She said the company recorded a one-time charge of about $350,000 in the first quarter of 2002 related to severance pay and related costs.

The press release said Edgewater also recorded a non-cash, goodwill impairment charge of $12.5 million because of accounting changes in the first quarter of 2002.