Restructuring Charges Contribute to Scient Loss

The company says pro-forma combined revenues came in at $20 million for the fourth quarter, down from $32 million the quarter before and $132 million in the fourth quarter of 2000. Revenue for the full year was $166 million, down from $698 million in 2000. (Since the two companies merged Nov. 7, the pro forma full year and quarterly results reflect the business of Scient as it would have been if it were combined with iXL the entire time.)

Pro forma net loss for the quarter came in at $55 million, compared with $274 million for the fourth quarter of 2000. The company incurred a charge of $20 million during the quarter for restructuring and other merger-related costs. For 2001, pro forma net loss was $365 million, compared to a $400 million net loss for 2000. The company took a charge of about $201 million during the year.

While Scient ended 2001 with 729 employees (555 of them in professional services), the company is planning to reduce headcount to 550 (460 in professional services) by the end of March. And the company says it expects to cut real estate obligations, which were more than $600 million in September 2001, to $64 million by the end of March.

President and CEO Christopher Formant said in a statement that Scient's actions over the last year will significantly strengthen the company's position.

The company ended the year with $62 million in cash, of which $41 million was restricted. In a move to increase the amount of liquid cash available after all the charges and merger-related costs, Scient executives announced letters of intent for a term loan to be guaranteed by individual members of its board of directors as well as an accounts receivable credit facility.

In addition, the board approved a reverse stock split, which will be voted on at the company's annual stockholders meeting in the second quarter.