eChapman puts '01 loss at $11 million

Fund manager's shortfall comes to 90 cents a share

April 16, 2002|By Bill Atkinson | Bill Atkinson,SUN STAFF

eChapman.com, an ailing money management firm run by Baltimore broker Nathan A. Chapman Jr., lost $11.4 million in 2001, the company reported yesterday. That compared with a net loss of $3.5 million in 2000.

On a per share basis, the loss was 90 cents vs. 26 cents the previous year. The company did not report revenue or assets and liabilities.

The results, which were not audited by an outside accounting firm, included a $7.3 million charge for merger-related goodwill. Other charges included $1.6 million for depreciation and amortization, $1.4 million related to the write-down of certain assets and $400,000 in other nonrecurring charges.

The firm, however, said that its results improved because its operating loss for the year was $900,000, or 7 cents per share, compared with an operating loss of $2.6 million, or 19 cents per share, in 2000.

The firm also said that it is following a rule that allows former clients of Arthur Andersen LLP to release unaudited results. Andersen is the embattled accounting firm tied closely to the Enron Corp. scandal.

eChapman.com said that it intends to file audited financial statements by May 31.

The firm's board of directors agreed to fire Andersen and hire Wilkins McNair, PC, as its independent auditor, according to the company statement.

eChapman executives could not be reached for comment.

Nathan Chapman, president and chief executive, said in the statement that the firm has made "substantial changes to its cost structure and has begun development of new proprietary products."

"As a result of these changes, first quarter 2002 is expected to reflect improved performance results over the first quarter of 2001," Chapman said.

Shares of eChapman closed yesterday at 12 cents on the Nasdaq stock market.

Earlier this year, the state pension board dropped Chapman Capital Management as manager of about $175 million of pension money after learning that the firm is under investigation by the Securities and Exchange Commission.

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