sankWednesday after the software maker reportedthird-quarter numbers in line with significantlyreduced estimates and announced plans to slash 15% of its workforce.
Shares of Retek declined 59 cents, or 23%, to$1.98 in recent trading.
Minneapolis-based Retek, which makes software forthe retail industry, said it will cut 15% of itsstaff, or 130 people, immediately and reducediscretionary spending to bring expenses in line withexpected revenue. President and CEO Steve Ladwig saidin a statement the company's goal is to return toprofitability and generate positive cash flow in thefirst half of 2003.
"The selling environment is very difficult asretailers are extremely cautious about making capitalinvestments given the uncertainty of their business,"Ladwig said.
Retek, which warned earlier this month that itwould post a loss rather than a profit, reported athird-quarter GAAP net loss of $85.9 million, or $1.63a share, including a charge of $75 million, or $1.42 ashare, to establish valuation allowances againstdeferred tax assets. That compares to a net loss of$6.9 million, or 14 cents a share, a year earlier.
Excluding the tax and other charges, the companyreported a loss of 7 cents a share in thethird-quarter, compared to pro forma earnings of 3cents a share a year earlier and pro forma earningsof 10 cents a share in the second quarter.
Third-quarter revenue fell to $40.5 million, down14.7% from $47.5 million in the year-earlier periodand 33.4% from $60.8 million in the second quarter.Software license revenue totaled $24.8 million,compared to $35.1 million in the year-earlier quarterand $45.7 million in the second quarter.
Reduced analyst estimates pegged Retek'sthird-quarter net loss at 8 cents a share on $40.1million in revenue, according to ThomsonFinancial/First call.
After lowering its third-quarter outlook in July,Retek reduced its numbers again at the beginning ofOctober. At that time, the company said it expected topost an operational loss, excluding charges, of 7cents to 8 cents a share on third-quarter revenuebetween $40 million and $41 million, includingsoftware license revenue ranging from $24 million to$25 million. Analysts had been expecting Retek to earn2 cents a share in the third quarter, on $50.7 millionin total revenue.
For the fourth quarter, Retek estimates revenuewill fall between $35 million and $37 million,including software license revenue of about $20million, and its operational loss will range between 4cents and 6 cents a share. The consensus estimate onWall Street called for $35.9 million in revenue and apro forma loss of 7 cents a share.