Caliber reports a larger loss

Sales shrink by 49%

online training firm is seeking capital

March 23, 2001|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Caliber Learning Network Inc., the Baltimore company that provides training online, reported yesterday that fourth-quarter sales fell 49 percent and its loss widened, and said it was trying to raise more money - either by securing capital, buying a smaller company or merging with a bigger one.

The company said it would need another $10 million to $15 million to break even in 2001.

Caliber's president and chief executive officer, Chris Nguyen, said it was difficult to speculate exactly how the money would be raised. During a conference call yesterday morning, he said: "We need additional capital to break even, and we have engaged a bank to help us look at both raising money as well as the normal strategic alternatives of purchase and mergers in order to assure that the Caliber corporation can continue to grow."

Nguyen said in a later interview that a scenario in which the company is bought and either moved or shut down is highly unlikely.

Caliber - a joint venture between Sylvan Learning Systems Inc. and MCI WorldCom Inc. - also announced yesterday that it has acquired Fulcrum Information Services Inc., a New York-based company that runs training seminars for businesses and had revenue of about $9 million in 2000.

Caliber paid $1 million in cash for Fulcrum and agreed to also pay stock and cash over the next two years based on Fulcrum's financial performance.

"This thing, as far as we can tell, is a total slam dunk," Nguyen said.

For the three months ended Dec. 31, Caliber reported a net loss of $11.7 million, or 94 cents per diluted share - 24 cents more than Wall Street estimates. That compared with a net loss of $5.5 million, or 45 cents per diluted share, posted for the corresponding quarter of 1999. During the 2000 fourth quarter, there were about 166,000 more outstanding shares than during the fourth quarter of 1999.

Revenue in the fourth quarter was $3.8 million, down from $7.5 million the year before.

The one analyst who covers the company could not be reached for comment yesterday.

Nguyen said the sharp decrease in revenue came, in part, because Caliber acquired Fulcrum, which was one of its customers last quarter and because accounting practices kept Caliber from counting fourth-quarter revenue it had earned from the former customer. Caliber, which employs 180, acquired Fulcrum earlier this week. Fulcrum has 60 workers.

Shares of Caliber - which had closed Wednesday at 75 cents - traded as high as $1.50 yesterday morning after the earnings report and closed at 94 cents, up 19 cents.

For the year, Caliber posted a net loss of $35.3 million, or $2.82 per diluted share, compared with $22.5 million, or $1.82 per diluted share, reported for 1999. Revenue fell 24 percent to $20.9 million from $26 million in 1999.

The company predicted 2001 revenue of $31 million to $33 million, including Fulcrum. Caliber also projected that it will report a loss of between $1.91 and $2.03 per diluted share for 2001.

Caliber added 26 new clients during its fourth quarter of 2000. In January, the company said it had secured $11 million with the promise of another $4 million from Sylvan Ventures LLC and Fleming US Discovery Fund III.

Mark Yanson, chief financial officer, said Caliber expects to be profitable during the first quarter of 2002.

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