Netcentives' Loss More Than Triples for 2000

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Netcentives Inc., a provider of loyalty and direct marketing services, reported a net loss for 2000 of $184.6 million, or a loss of $4.69 per share. That was more than triple its loss of $46.8 million, or a loss of $1.95 per share, for 1999.


In the fourth quarter of 2000, Netcentives reported a net loss of $84.5 million, or $2 per share, compared with a loss of $19 million, or a loss of 64 cents per share, in the fourth quarter a year earlier.


However, the company's revenue increased substantially in 2000, to $42.8 million from $7.8 million a year earlier. For the fourth quarter, Netcentives reported revenue of $17.4 million, up from $2.8 million in the same quarter in 1999.


"During the fourth quarter, we benefited from strong seasonal momentum as our loyalty and e-mail platforms enabled our clients to successfully attract and retain their most valuable audiences during the holidays," said West Shell, chairman/CEO.


The company's cash position worsened in 2000 as well. For the full year, it reported cash and equivalents of $31.7 million, down from $75.3 million in the previous year.


Despite the increase in the company's net loss, analysts were encouraged by Netcentives' improving revenue. They also were not particularly disturbed by the company's dwindling cash position.


"Although [Netcentives] ended Q4 with $45.7 million in cash and short-term investments, down roughly $20 million from last quarter, management continues to believe its cash levels are sufficient to fuel the company to cash flow breakeven in [the fourth quarter of 2001]," said Matthew Davies, an analyst at JP Morgan H&Q.


He said Netcentives' cash burn rate in the fourth quarter was consistent with its third-quarter burn rate.
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