eBenX Drops on Q1 Warning

eBenX, Inc. (Nasdaq: EBNX) fell 1.19 to 6.06 Friday after the company, whichprovides business-to-business (B2B) e-commerce services to employers,benefit advisors and health plans, said it enrolled fewer beneficiaries thanplanned last year, and that its first-quarter results will suffer.

The company said it remains “comfortable” with analysts’ fourth-quarterrevenue and earnings estimates, and still expects a profit in the 2001fourth quarter.

First-quarter results, however, will be hurt by the lower enrollmentcommitment numbers, eBenX said.

As of year-end, the company had 855,000 enrollees, below its target of900,000 to one million. Delayed decision-making and “uncertainty in economicconditions” caused the company to miss its target, said president and chiefexecutive officer John Davis.

“We continue to believe that we are in the right strategic position forgrowth and profitability,” Davis said. “Our sales funnel remains strongdespite some delays in decision-making.”

Added Davis: “When you’re creating a new category like we are, you can’t always forcebuying decisions on your timetable. But we believe the tippingpoint will come.”

Davis also said the company is cutting expenses, “honing” its marketing messages,and reorganizing its sales organization.

“With both health care costs and concerns about an economic slowdownincreasing, we believe benefit managers and CFOs will more readily see thevalue of our solutions,” Davis said.

eBenX says it uses the Internet and other technology to simplify andautomate the exchange of data and money among parties in the health andwelfare benefit supply chain, resulting in lower costs for employers, healthplans and employees.

The company is based in Minneapolis, Minnesota.

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