In its fourth-quarter earnings report issued Thursday, Stamps.com saidit is sticking to earlier projections that it will be operating in the blackin the first quarter of 2002.
“The initiatives we’ve put in place in the fourth quarter of 2000 and thefirst quarter of 2001 have put us in an even stronger position to achieveour financial goals of profitability and cash flow,” said Stamps.com chief executive officer Bruce Coleman.
Revenue for the fourth quarter climbed 26 percent from the previous quarter to reachUS$5.3 million, while the net loss before charges was $29 million, or 60 cents per share, down from $38.5 million, or 80 cents per share inthe third quarter.
For fiscal year 2000, the Santa Monica, California-based company reported thatits revenue was $15.2 million, while its net loss totaled$122.7 million, or $2.62 per share.
The postage firm also said it is on track to bring in $23 million in revenuefor 2001 — which would represent a 60 percent increase from last year.
Like many formerly free-spending dot-coms sobered by therealities of the market downturn, Stamps.com said efforts to cool its cashburn rate are key to its plan to achieve profitability.
Stamps.com said that a round of job cuts it implemented earlier this month, which affected 150 employees, or 50 percent of its workforce, will play asignificant part in the cost-saving measures. In October, the firm also laid off 240 employees, or 40 percent of its workforce at the time.
The job cuts will account for a savings of roughly $20 million to $25 million annually, Stamps.com said. The company projects that it will take a one-time charge related to the restructuring during the first quarter of this year.
Stamps.com also said that it expects to spend between $20 million and $25 million thisyear continuing its operations, an 80 percent drop fromthe company’s total cash burn for 2000.
Stamps.com said that it also plans to reduce sales and marketing and promotions expenditures by roughly$60 million from 2000 levels, to $15 million for 2001.
In addition, the company will renegotiate or terminate fixed payment partnerships andincrease prices for lower revenue customers. Instead, Stamps.com said itwill focus on acquiring higher revenue customers.
As a way to boost revenue, Stamps.com also intends to expand its offeringsthis year, including discounted Web postage prices, instant licensing and anew service that will allow customers to print a sheet of stamps from theInternet.
Although postage has been available for purchase via the Web for a couple ofyears, many U.S. businesses and consumers have been slow to adapt to theidea.
As a result, Stamp.com’s primary rival, E-Stamp, announced in November thatit was abandoning the online postage business and entirely revamping itsbusiness model as an Internet-based shipping and logistics firm.
Many analysts maintain that as online bill payment becomes more widespread, the demand for Internet postage may be athing of the past. A reportreleased earlier this week by Gartner Group projected that the number ofbusiness-to-business firms using electronic invoicing and payment systemswill reach 26 percent by the end of 2002, an almost three-fold increase overthis year’s levels.
Moreover, that figure is set to rise to 35 percent bythe end of 2004, forecasted Gartner.
Similarly, a Jupiter Research study found that by 2005, more than 40 millionU.S. households will pay at least part of their bills using Internet billpayment services.