K2 Design Posts Record Revenues, Reduces Loss

K2 Design Inc. said its revenues from continuing operations rose 73% to $1,895,232 in the second quarter, up from $1,097,373 reported in the same period in 1997.

Still, the company had a loss from continuing operations (before interest and other income and income tax provision), in the quarter of $82,425, or $.02 per share, as compared to a loss of $380,951, or $.10 per share in the 1997 period.

And management said it believes the company’s results of operations in the third quarter of 1998 will reflect a significant decrease in revenues as compared to the comparable period in 1997, and an operating loss, principally as a result of the company’s focus on reorganizing its senior management team.

For the six months ended June 30, K2’s revenues from continuing operations rose 47% to $4,035,614, from $2,747,476 reported in the same period in 1997. The company had income from continuing operations (before interest and other income and income taxes), in the six months of $28,112, or $.01 diluted earnings per share, as compared to a loss of $549,193, or $.15 diluted earnings per share in the 1997 period.

In addition, K2 recognized a one-time gain in the three months ended June 30, 1998 from the sale of its former CLIQNOW! business unit to 24/7 Media Inc.of $3,102,123, or $.87 per share (basic), $.81 per share (diluted). The gain includes the value of approximately 197,500 shares of TFSM common stock at K2’s $13.02 conversion price. These shares are subject to a lock-up expiring in February 1999.

This one-time gain resulted in K2’s total record net income for the three and six months ended June 30 of $3,004,572 and $3,042,489, respectively, as compared to net losses of $473,343 and $801,199 in the comparable prior periods.

On a diluted basis, net income per share in the three and six months ended June 30, was $.78 and $.80, respectively, as compared to net losses in the comparable prior periods of $.13 and $.22.

K2 clients include WavePhore Inc., Standard & Poors Inc. and Waterhouse Securities.