Lante Reports Expected 2Q Losses; Sees Light In New Strategy, New Customers

Lante CEO Rudy Puryear told analysts late Monday that the company has rounded a difficult corner, despite continued earnings losses for the second quarter and stock that closed the day at 90 cents per share.

"The current share price does not truly reflect the true value of our business," Puryear told investors during the second-quarter 2001 conference call.

The Chicago-based e-services company reported a second-quarter loss, before charges, of $5.2 million, or 13 cents per share, on sales of $10.2 million. The numbers are in line with Lante's midquarter estimates and the consensus at First Call.

Still, Puryear told analysts the June business shift from B2B to a new strategy of "partner integration work," also known as enterprise commerce management, has landed the company eight new Global 2000 clients. Though the clients have yet to be announced publicly, Puryear noted work for a large parts product company, a couple of financial services company, and a large minerals and mining industry consortium.

"We are certainly witnessing a growing demand in the Fortune 1000 community for these integration services," said Puryear. "And we are beginning to see the positive effects of this demand."

Puryear told analysts the work is a natural extension for the company, now focused exclusively on helping clients connect with suppliers, customers, channels and development partners. The road to the new business focus, however, has been anything but easy.

Like many other Web integrators struggling to stay afloat, Lante cut 22 percent of its staff, or 70 of 340 employees, in mid-June. The staff cut represented the third layoff since December 2000. Senior Lante management also saw a 10 percent cut in salaries. Offices in Dallas, New York and Los Angeles have been transformed into centers of sales and business development.

The second quarter, however, does look a little bit better than the first quarter this year, when Lante reported a loss, before charges, of $6.4 million, or 17 cents per share, on sales of $12 million.

Competition, said Puryear, is still fierce. While Lante finds itself up against rate-cutting tactics with the likes of Accenture and PricewaterhouseCoopers, Puryear predicts his smaller 17-year-old company's exclusive focus on partner integration will pay off in the long run.

Looking ahead to the third quarter, Puryear told analysts he expects the company to improve its cash earnings markedly and reach a break-even position.