Avista Advantage, the Avista Corp. subsidiary that manages utility bills for businesses with multiple sites, slashed its losses by 60 percent last year and now expects it might break even by the middle of this year.


The operation, which has among its clients such prominent national concerns as Microsoft Corp., Nordstrom Inc., Office Depot Inc., and ConAgra Foods Inc., cut its annual net loss to $4.3 million in 2002, down from $10.7 million a year earlier.


The subsidiary also increased its customer base last year. As of Dec. 31, it served 247 customers with a total of more than 98,000 sites for which they received billings, compared with 203 customers with a total of 79,500 billed sites at the end of 2001.


In a conference call with securities analysts on Jan. 30, Avista Corp. Chairman, President, and CEO Gary Ely said Avista Advantage had increased its revenues in 2002 while reducing its processing costs. Operating cash flow reached break even in the November-December 2002 time period, and we believe it should be consistently positive by mid-year 2003, he said. Avista Advantage had logged losses persistently since it was launched in 1995.


Last year, Avista Advantages revenues grew to $16.9 million, up from $13.2 million the year before. In 2000, revenues stood at just $4.97 million, and the operation posted a net loss of $11 million.


Avista Advantage analyzes and pays its clients utility and telecommunications bills, but its services range beyond that to patented cost-management and consulting tools. It says it can glean, by analyzing utility and telecommunication bills, information that its customers can use to manage and reduce their facility expenses and to plan for the future.


Avista Advantage says on its Web site that after it begins handling its customers bills, they typically achieve savings of about 10 percent. It calls itself the leading provider of facility intelligence for large multi-site organizations.


The subsidiary now has 285 employees and 36 temporary workers, says Avista Corp. spokesman Hugh Imhof. Its offices are at 1313 N. Atlantic, in the Rock Pointe Corporate Center.


Avista Advantage uses the Internet to receive thousands of utility and telecommunications bills from locations across North America. It applies two critical business systems, on which it has five patents, to analyze that information.


One of those systems, Facility IQ, provides operational information drawn from bills, while the other, AviTrack, helps ensure that customers are getting the most effective services at the right price, Avista Corp. says in its recently released 10-k annual report. Avista Advantage processed $4.9 billion worth of utility and telecommunications bills last year, $4.3 billion worth in 2001, and $1.1 billion worth in 2000.


While the nations technology market was super hot in the late 1990s, Avista Advantage was one of three technology-based subsidiaries that former Avista Corp. Chairman, President, and CEO Tom Matthews had hoped to grow rapidly and spin off through initial public offerings, reaping windfalls for Avista Corp. shareholders. Before he could do that, though, the technology market cracked, and the stock market plunged. Meanwhile, Avista Corp.s main operating unit, Avista Utilities, was saddled with energy-trading losses and high excess wholesale power costs as electricity shortages swept across California and Enron traders applied manipulative schemes.


Eventually, Matthews left Avista, and management concentrated on solidifying the company predominantly as a utility. All along, Avista Advantage had a stellar roster of clients, but it and Avista other technology subsidiaries produced only losses.


In early January 2002, Avista Advantage reorganized its top management. President and CEO Gerry Crooks moved to the new position of founder and chief strategic officer, and Harry Stephens, who Avista Advantage said had extensive management experience with a variety of startups and Fortune 100 companies, became president and CEO. He had been working as a strategic adviser to Avista Advantage since mid-2001. Stephens has declined several requests for an interview.