Lake Forest software publisher FutureLink Corp. said Monday it has reduced its work force by 5%, consolidated three data centers and restructured its debt in a bid to increase working capital and reduce operating costs.
FutureLink eliminated 25 of the positions by merging its two other U.S. data centers into its Lake Forest facility. The company, which has 593 employees, is seeking to cut costs by $7 million this year.
"We are continuing our efforts to raise additional capital and to reduce expenses consistent with the current economic situation," Chief Executive Howard Taylor said in a press release.
The amended credit line from Foothill Capital Co. will allow the Lake Forest company to borrow up to $15 million. The company also received $3.5 million in bridge financing from Pequot Private Equity, the venture capital arm of Pequot Capital Management, which is committed to investing an additional $1.5 million by the end of May.
The amendment requires the company to raise at least $5 million in additional debt or equity financing by May 31, and another $5 million by June 30. The Pequot bridge loan will satisfy the initial financing requirement, FutureLink said.
The company said these actions keep it on track to reach its goal of breaking even before interest, taxes and amortization by the end of the fourth quarter.
For 2000, the company reported a loss before charges of 93 cents a share.
The stock closed Monday at 41 cents a share, up a penny, on the Nasdaq market. The shares have lost nearly 97% of their value over the last year, trading as high as $14.38 in early May.
FutureLink also said it has named Eugene L. Froelich as executive vice president and chief financial officer.
Before joining FutureLink, Froelich was chief operating officer and chief financial officer at Wizshop.com, an Internet shopping service that was acquired by Semotus Solutions Inc.
He previously spent 16 years at MCA Record Group, a subsidiary of MCA Inc., during which he held positions including assistant treasurer and chief financial officer of MCA Records and president of MCA Records Group.
Froelich replaces Rick White, who returns to his previous job as senior vice president of corporate administration.
Reuters and Dow Jones Newswires were used in compiling this report.