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Evoke posts strong results

The company, which provides Web conferencing and Webcasting services, beats fourth-quarter estimates and says it expects to reach positive cash flow in the first quarter of 2002.

    Evoke Communications beat estimates for its fourth quarter and said it expects to reach positive cash flow in the first quarter of 2002.

    Analysts cheered the strong results.

    The Louisville, Colo.-based company, which provides Web conferencing, Webcasting and e-mail audio messaging services, reported a net loss for the fourth quarter of $14.1 million, or 30 cents a share, easily topping First Call's analysts' estimate by 6 cents.

    The company took an $11.1 million charge in the quarter for previously announced restructuring plans. The loss including the charges was $33.3 million, or 71 cents a share.

    Revenue for the quarter ended Dec. 31 was $7.7 million, ahead of analysts' estimate, and a 38 percent sequential jump from the $5.6 million seen in the previous quarter.

    Gross profit increased to $2.4 million compared to a negative gross profit of $480 million. The company's gross margin nearly doubled to 30.7 percent from 16.2 percent in the third quarter.

    The company was also bullish on its outlook. According to CEO Paul Berberian, the company expects profitability from earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2002.

    Berberian also said the company is entering 2001 with $43.3 million in cash on the balance sheet. Revenue for the year is projected to be between $36 million and $44 million, with EBITDA losses in the $14 million to $18 million range.

    Analyst reaction was positive. At CIBC, analyst John Corcoran reiterated a "buy" rating on the stock along with a price target of $10.

    In a research note, Corcoran highlighted the strong outlook for the company. A stable pricing environment, the likelihood of the company meeting revenue and earnings targets, effective cost-cutting measures, and a fully funded business plan all bode well for Evoke, the analyst wrote.

    Analyst Richard A. Juarez at Robertson Stephens was also bullish.

    "We believe that continued demonstration by management that the company is successfully executing its restructuring plan while maintaining revenue momentum could lead to share price appreciation," the analyst noted.

    Juarez also said that the company's technology could make it a potential acquisition target.

    The analyst maintained a "long-term buy" rating on the company's stock and bumped up fiscal 2001 revenue estimates.

    Full-year revenue for 2000 was $18 million, slightly below analysts' forecasts, but increased from the $2.2 million of revenue reported in 1999.

    Net loss for the 12-month period ended Dec. 31 was $64.5 million, or $3.01 per share, excluding charges, much narrower than analysts' projections calling for a loss of $3.17 per share. The company posted a net loss of $10.6 million, excluding charges, for the previous year.