Burntsand Taking Cost-Related Steps to Maintain Its Leadership Position in an Uncertain Economic Climate

Apr 04, 2001, 01:00 ET from Burntsand Inc.

    SAN JOSE, CA, April 4 /PRNewswire/ - Burntsand (TSE:BRT), a leading North
 American e-Business Integrator, today announced that it is proactively taking
 steps to reinforce its North American leadership position. These steps include
 reducing the number of people in the company, balancing its mix of skills and
 locations, closing two of its smaller offices and reducing rent costs. The
 company also is lowering its first quarter revenues and earnings outlook.
     Burntsand is reducing its total workforce by approximately 60 employees,
 or approximately 13% of its total workforce. The workforce reduction affects
 operations in Canada and the United States. While retaining all of its overall
 existing skill-sets and capabilities, Burntsand is changing its geographical
 skill-set mix to place more emphasis on the skills clients are demanding
 within the Company's mid-term planning horizon. Burntsand is closing its
 smaller offices in Winnipeg, MB and Denver, CO, and will be consolidating
 office space in some cities where it has multiple office locations. These
 changes affect mostly the Western regions in North America, as strong demand
 continues in the East. These changes will not impact the company's ability to
 grow when demand strengthens.
     "The economic environment in North America has become very uncertain,"
 said Paul Bertin, Burntsand's President & CEO. "The month of March saw an
 unusual number of slow-downs, deferrals and in some cases, cancellation, of
 previously approved client projects. This has resulted in our making the very
 difficult, but needed, decisions about our people and costs. Although revenue
 for Q1 will grow year over year by approximately 45-50%, and, EBITDA will be
 positive (before restructuring charges), these initiatives are being taken to
 ensure we continue to be the leader in providing our clients with the critical
 business and technology initiatives that drive their competitive advantage as
 they transition to an e-Business. From an employee standpoint, this reduction
 in people is the first in our history and we would trust it would be the last.
 Our hope is that we will be able to rehire many of these employees as our
 demand firms up in the future."
     "While we have been monitoring the customer demand environment
 intensively, as a leadership team we decided not to take these steps until the
 first quarter progressed to a point where we could evaluate the extent of the
 potential mid term problem," stated Blair Baxter Vice President and CFO.
 "Although we signed an excellent number of quality new customers in the
 quarter, in March a number of our blue-chip customers have delayed projects
 due to their uncertainty of the economic situation and their concerns about
 their own business performance. The steps being implemented will have no short
 or long term detrimental effect on any of our customers. From a financial
 perspective our strong cash position gives us a solid foundation from which to
 move forward. This decision gives us the appropriate risk/reward scenario with
 respect to financial performance for the next quarter and the rest of the
 year."
     Burntsand will take a restructuring charge in the first quarter of 2001
 of approximately $3 million (includes approximately $1.5m of cash charges),
 which will consist of severance and related expenses, and other charges
 related to the office closings and office space consolidations. The company
 expects cost savings from these actions of approximately $1.9 million in Q2
 FY2001, and $6.4 million on an annualized basis.
     The company now expects its first quarter 2001 revenues to be
 approximately 15 percent lower than the analyst consensus estimate of $25
 million, with pro forma earnings (which exclude amortization of intangibles,
 acquisition costs, and restructuring costs) estimated to be approximately
 break even for the first quarter. The company anticipates that its cash
 position at the end of the first quarter will be approximately $38 million.
     Jim Yeates, Chairman, and, Paul Bertin, President & CEO will host a
 conference call today at 11:00 a.m. (EST) at (800) 313-8070, or local 416 &
 905, (416) 620-2400. Burntsand officials will discuss the company's
 organization changes and revised expectations. A re-broadcast of the call will
 be available from 1:00pm (EST) today through April 11, 2001 at 11:59pm (EST)
 by dialing (800) 558-5253, passcode 18513465, or local 416 & 905, 416-626-
 4100, passcode 18513018.
     Actual results for the first quarter 2001, and further details about the
 company's performance, will be reported on May 8th, 2001. Burntsand will host
 an investor call at 11 a.m. (EST) that day.
     About Burntsand
     Burntsand is an e-Business Solutions Integrator focusing on SellSide
 (customer centric) and InSide (employee and knowledge centric) strategic
 internet-enabled applications. Burntsand's e-Services encompass the strategy,
 technical, and creative disciplines required to define and implement these
 strategic e-Business solutions. Burntsand's success results from its ability
 to rapidly create e-Business solutions for clients in the SellSide
 applications of e-Commerce, e-Customer Relationship Management, e-Content
 Management and InSide applications such as e-Business Intelligence and global
 Knowledge Management Solutions. Headquartered in Toronto, ON, Burntsand
 operates from eight North American locations. The company trades on the
 Toronto stock exchange (TSE) under the symbol BRT, Burntsand's website address
 is www.burntsand.com .
     Forward-Looking Statements
     Certain statements contained in this press release, including statements
 which may contain words such as "could", "expect", "believe", "will" and
 similar expressions and statements relating to matters that are not historical
 facts are forward-looking statements. Such forward-looking statements involve
 known and unknown risks and uncertainties which may cause the actual results,
 performances or achievements of Burntsand to be materially different from any
 future results, performances or achievements expressed or implied by such
 forward-looking statements. Such factors include: general economic and
 business conditions; stock market volatility; supply and demand for services
 offered by Burntsand; changes in laws and regulations; Burntsand's ability to
 compete successfully, protect its intellectual property rights, and adapt to
 technological advances and changing industry standards and other factors. The
 forward-looking statements in this press release are based on management's
 reasonable beliefs as of the date of this release, and Burntsand assumes no
 obligation to update them to reflect subsequent information or events.
 
 
 

SOURCE Burntsand Inc.
    SAN JOSE, CA, April 4 /PRNewswire/ - Burntsand (TSE:BRT), a leading North
 American e-Business Integrator, today announced that it is proactively taking
 steps to reinforce its North American leadership position. These steps include
 reducing the number of people in the company, balancing its mix of skills and
 locations, closing two of its smaller offices and reducing rent costs. The
 company also is lowering its first quarter revenues and earnings outlook.
     Burntsand is reducing its total workforce by approximately 60 employees,
 or approximately 13% of its total workforce. The workforce reduction affects
 operations in Canada and the United States. While retaining all of its overall
 existing skill-sets and capabilities, Burntsand is changing its geographical
 skill-set mix to place more emphasis on the skills clients are demanding
 within the Company's mid-term planning horizon. Burntsand is closing its
 smaller offices in Winnipeg, MB and Denver, CO, and will be consolidating
 office space in some cities where it has multiple office locations. These
 changes affect mostly the Western regions in North America, as strong demand
 continues in the East. These changes will not impact the company's ability to
 grow when demand strengthens.
     "The economic environment in North America has become very uncertain,"
 said Paul Bertin, Burntsand's President & CEO. "The month of March saw an
 unusual number of slow-downs, deferrals and in some cases, cancellation, of
 previously approved client projects. This has resulted in our making the very
 difficult, but needed, decisions about our people and costs. Although revenue
 for Q1 will grow year over year by approximately 45-50%, and, EBITDA will be
 positive (before restructuring charges), these initiatives are being taken to
 ensure we continue to be the leader in providing our clients with the critical
 business and technology initiatives that drive their competitive advantage as
 they transition to an e-Business. From an employee standpoint, this reduction
 in people is the first in our history and we would trust it would be the last.
 Our hope is that we will be able to rehire many of these employees as our
 demand firms up in the future."
     "While we have been monitoring the customer demand environment
 intensively, as a leadership team we decided not to take these steps until the
 first quarter progressed to a point where we could evaluate the extent of the
 potential mid term problem," stated Blair Baxter Vice President and CFO.
 "Although we signed an excellent number of quality new customers in the
 quarter, in March a number of our blue-chip customers have delayed projects
 due to their uncertainty of the economic situation and their concerns about
 their own business performance. The steps being implemented will have no short
 or long term detrimental effect on any of our customers. From a financial
 perspective our strong cash position gives us a solid foundation from which to
 move forward. This decision gives us the appropriate risk/reward scenario with
 respect to financial performance for the next quarter and the rest of the
 year."
     Burntsand will take a restructuring charge in the first quarter of 2001
 of approximately $3 million (includes approximately $1.5m of cash charges),
 which will consist of severance and related expenses, and other charges
 related to the office closings and office space consolidations. The company
 expects cost savings from these actions of approximately $1.9 million in Q2
 FY2001, and $6.4 million on an annualized basis.
     The company now expects its first quarter 2001 revenues to be
 approximately 15 percent lower than the analyst consensus estimate of $25
 million, with pro forma earnings (which exclude amortization of intangibles,
 acquisition costs, and restructuring costs) estimated to be approximately
 break even for the first quarter. The company anticipates that its cash
 position at the end of the first quarter will be approximately $38 million.
     Jim Yeates, Chairman, and, Paul Bertin, President & CEO will host a
 conference call today at 11:00 a.m. (EST) at (800) 313-8070, or local 416 &
 905, (416) 620-2400. Burntsand officials will discuss the company's
 organization changes and revised expectations. A re-broadcast of the call will
 be available from 1:00pm (EST) today through April 11, 2001 at 11:59pm (EST)
 by dialing (800) 558-5253, passcode 18513465, or local 416 & 905, 416-626-
 4100, passcode 18513018.
     Actual results for the first quarter 2001, and further details about the
 company's performance, will be reported on May 8th, 2001. Burntsand will host
 an investor call at 11 a.m. (EST) that day.
     About Burntsand
     Burntsand is an e-Business Solutions Integrator focusing on SellSide
 (customer centric) and InSide (employee and knowledge centric) strategic
 internet-enabled applications. Burntsand's e-Services encompass the strategy,
 technical, and creative disciplines required to define and implement these
 strategic e-Business solutions. Burntsand's success results from its ability
 to rapidly create e-Business solutions for clients in the SellSide
 applications of e-Commerce, e-Customer Relationship Management, e-Content
 Management and InSide applications such as e-Business Intelligence and global
 Knowledge Management Solutions. Headquartered in Toronto, ON, Burntsand
 operates from eight North American locations. The company trades on the
 Toronto stock exchange (TSE) under the symbol BRT, Burntsand's website address
 is www.burntsand.com .
     Forward-Looking Statements
     Certain statements contained in this press release, including statements
 which may contain words such as "could", "expect", "believe", "will" and
 similar expressions and statements relating to matters that are not historical
 facts are forward-looking statements. Such forward-looking statements involve
 known and unknown risks and uncertainties which may cause the actual results,
 performances or achievements of Burntsand to be materially different from any
 future results, performances or achievements expressed or implied by such
 forward-looking statements. Such factors include: general economic and
 business conditions; stock market volatility; supply and demand for services
 offered by Burntsand; changes in laws and regulations; Burntsand's ability to
 compete successfully, protect its intellectual property rights, and adapt to
 technological advances and changing industry standards and other factors. The
 forward-looking statements in this press release are based on management's
 reasonable beliefs as of the date of this release, and Burntsand assumes no
 obligation to update them to reflect subsequent information or events.
 
 
 SOURCE Burntsand Inc.