Teflon: The next nurturer which I suggest is worth a look (at least) is ICGE - the quintessential B2B nurturer. Again you were ahead of me on this one.
Latest report:
Internet Capital Group (ticker: ICGE, exchange: Nasdaq) News Release - Thursday, February 24, 2000
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Internet Capital Group Announces Fourth Quarter Results; Network Increased to 49 Partner companies
WAYNE, Pa.--(BUSINESS WIRE)--Feb. 24, 2000--Internet Capital Group, Inc. (NASDAQ: ICGE) today reported its results for the fourth quarter and year ended December 31, 1999. "Internet Capital Group enjoyed a remarkable year in 1999," said Walter Buckley, president and CEO of Internet Capital Group. "Our partner companies continued to benefit from the enormous market opportunities created by the growth of business-to-business e-commerce. During the course of the year we entered into 26 new markets and fortified our collaborative network of business-to-business e-commerce companies with acquisitions in 29 new partner companies. To support the operational needs of our partner companies and help them to attain leadership positions in their respective markets, we strengthened our management team, attracting some of the brightest minds and industry talent to Internet Capital Group."
Buckley added, "Internet Capital Group began its global expansion in 1999 with the opening of an office in London. We also formed strategic relationships with industrial giants like Ford Motor Company, IBM and AT&T. After laying the groundwork in 1999, we will continue in 2000 to execute our vision to aggregate the top 50 global markets and strengthen our position as the leading B2B e-commerce company."
Expands B2B Network with 10 New Partner companies
During the quarter ended December 31, 1999, Internet Capital Group spent an aggregate of $412 million on acquisitions and follow-on financings. The Company acquired interests in 10 new partner companies, including eight market-makers, as the Company continued to focus its efforts on acquiring leading companies in its global top 50 markets. The Company also spent $94 million on 20 follow-on financings in its existing partner companies, increasing its commitment and ownership position in these businesses. Market-makers are companies that bring buyers and sellers together by creating Internet-based markets for the exchange of goods, services and information in particular industrial sectors. At December 31, 1999, the Company had 49 partner companies of which 30 were market-makers. The new partner companies acquired during the quarter are as follows:
Company Ownership Description ---------
Market-makers
Animated Images 50% Provides an online marketplace
for the apparel and sewn goods
industries.
CourtLink 19% Provides an online marketplace
for court documents.
eMerge Interactive 28% Provides an online marketplace
for the cattle industry.
JusticeLink 37% Provides an online marketplace
for electronic filing and
retrieval of legal documents and
information among courts,
attorneys, their clients and
other interested parties.
MetalSite 44% Provides an online marketplace
to buy and sell metal products.
ICG Commerce
(fka Purchasing 60% Provides strategic sourcing
Solutions) consulting and online Internet
purchasing.
RetailExchange.com 30% Provides an online marketplace
for the exchange of excess
consumer products.
USgift.com 38% Provides an online marketplace
for gift, garden and home decor
accessories.
Enabling Service
Providers traffic.com 20% Provides real time traffic
monitoring for logistics and
transportation optimization
Jamcracker 24% Provides integrated application
service provider services to
middle market companies.
Internet Capital Group Acquires Significant Stakes in MetalSite and eCredit.com
On December 29, 1999, Internet Capital Group acquired an ownership position in MetalSite from Weirton Steel for approximately $180 million in cash and stock. The company, headquartered in Pittsburgh, PA, commenced operations in 1998 to sell prime and excess prime steel through its e-commerce web site. MetalSite is now the preeminent site on the Web to source, buy and sell metal products. Weirton Steel, which developed the MetalSite concept, will continue to own a significant share of the e-commerce company. Weirton Steel is also one of nearly 40 suppliers on MetalSite's Website which includes other leading suppliers such as Bethlehem Steel, LTV Steel, Steel Dynamics and Ryerson Tull, each of which is also a MetalSite owner.
Earlier today, Internet Capital Group announced that it agreed to acquire a significant stake in eCredit.com, for approximately $450 million in stock. This represents one of Internet Capital Group's largest capital and strategic acquisitions to date. eCredit.com is the market leader in connecting businesses to financing partners and global information sources to permit real-time, point-of-sale credit and financing decisions. eCredit.com is the first Internet-based integrated financial transaction clearing platform capable of processing and clearing financial transactions instantly online. The agreement is part of ICG's strategy to build open, collaborative platforms that will enable ICG's Partner companies and others to leverage the reach and immediary of the Internet.
"The acquisitions of MetalSite and eCredit.com were important milestones for Internet Capital Group for two reasons. First, MetalSite and eCredit.com represent two important markets in the global top 50. Both of these markets embody enormous revenue and profit potential. Second, Internet Capital Group was able to use equity to acquire significant stakes in these entities, showing our ability to leverage our currency and participate in later stage acquisition opportunities, " stated Ken Fox, co-founder and Managing Director at Internet Capital Group.
eMerge Interactive Completes Initial Public Offering
eMerge Interactive (EMRG) completed an initial public offering on February 3, 2000. eMerge sold eight million shares at $15 per share. "eMerge has done an incredible job building the premier digital marketplace for the cattle industry. We have high expectations for the growth of the company as they aggressively expand into adjacent markets. The strength of the management team and business model have provided valuable insights to the other 29 market-makers in our network," said Doug Alexander, Managing Director of East Coast operations for Internet Capital Group and a board member of eMerge. As of February 23, 2000, the aggregate market value of Internet Capital Group's public company holdings, which include VERT, BWAY, USIT, and EMRG was approximately $4.0 billion.
Internet Capital Group Further Expands Management Team
During the fourth quarter Internet Capital Group continued to attract high quality talent to expand its acquisition and operational capabilities. Tony Ibarguen joined Internet Capital from his post as President and Chief Operating Officer of Tech Data Corporation, a $15 billion IT distribution and logistics services provider with 9,000 employees in over 30 countries worldwide. Ibarguen will coordinate and manage Internet Capital Group's professional services groups to provide a strategically tailored bundle of services to the Company's network of partner companies.
Randy Tinsley, previously Vice President of Corporate Development and former Treasurer at Amazon.com., joined Internet Capital Group as Managing Director of Acquisitions. During Tinsley's years at Amazon.com and Intel, he was involved in more than 100 transactions including full acquisitions and minority investments both within the US as well as internationally. Internet Capital Group will capitalize on Tinsley's diverse background in early and late stage acquisitions as it continues to identify key additions to its network of partner companies.
Mary Coleman joined Internet Capital Group's senior management team from her position as Chairman and CEO at publicly-traded Baan Company (BAANF), Europe's 2nd largest software company and a leader in the Enterprise Application Software industry. Coleman will use her breadth of domain expertise, entrepreneurial success, public company CEO experience and outstanding leadership skills to work with and develop Internet Capital Group's partner companies.
Internet Capital Group and DuPont Announce CapSpan Joint Venture
On February 18, 2000 Internet Capital Group and DuPont announced a joint venture, called CapSpan. The CapSpan partnership was created to provide both companies with a focused team with which to acquire interests in B2B companies in several vertical markets, initially focusing on apparel, construction, plastics and e-procurement. Internet Capital Group will provide management, financial, technical and infrastructure expertise to CapSpan's companies. The partnership will eventually also target other industries in which DuPont operates. DuPont has forecasted that it will generate $1 billion in Internet-related transactions over the next year. CapSpan intends to capture a majority of that amount by channeling the transactions through Internet Capital Group's market markers.
DuPont will provide two-thirds of CapSpan's $100 million initial capitalization, and Internet Capital Group will provide one-third. The company will be based in Wayne, Pennsylvania. Erik Frywald, formerly of Dupont, will serve as CapSpan CEO and Skip Maner of Internet Capital Group will be CapSpan's COO. "This joint venture will enable us to maximize the long-term potential of our more than 55 B2B e-commerce partner companies," Walter Buckley said. "CapSpan will help us to achieve greater market reach, lower transaction costs, and increased productivity to buyers and sellers of industrial goods and services worldwide."
Internet Capital Group Raises $1.4 Billion in Cash
On December 15, 1999, Internet Capital Group completed a follow-on offering of 8.2 million shares of its common stock at $108 per share and $566 million of convertible notes. This was the largest Internet offering to date. In conjunction with the offering Ford and AT&T joined Internet Capital's group of strategic investors, which includes GE, IBM, Dell Computer, Comcast, Compaq and Safeguard Scientifics. Net proceeds from these transactions aggregated approximately $1.4 billion. "With our expanded capital base Internet Capital Group will now be able to aggressively pursue the balance of the top 50 global markets that we have identified," said Walter Buckley. "The e-commerce transformation is touching every business and every market. Internet Capital Group will be at the core of this great change as we deploy our capital over the next 12-18 months to aggregate the B2B e-commerce marketplace and strengthen our market leadership." As of December 31, 1999, on a separate company basis, Internet Capital Group had a cash and short-term investment balance of approximately $1.3 billion.
Aggregate Partner company Revenues
One of the measures of Internet Capital Group's progress is the revenue growth of its partner companies. On a pro-forma unaudited basis, aggregate revenues of Internet Capital Group's market-makers, at 100% of their revenues, grew from $10.6 million in the fourth quarter of 1998 to $74.2 million in the fourth quarter of 1999, or 598%, and Enabling Service Providers grew from $30.4 million to $69.3 million, or 128%. The aggregate revenues of all of Internet Capital Group's partner companies grew about 250%, from $41 million in the fourth quarter of 1998 to $143.5 million in the fourth quarter of 1999.
Internet Capital Group Financial Results
Internet Capital Group reported a loss for the quarter ended December 31, 1999 of $23.4 million compared to net income of $2.0 million a year ago. For the year ended December 31, 1999 the loss was $29.8 million compared with net income of $13.9 million in the comparable period last year. The Company's share of partner company losses increased from $14.1 million in 1998 to $103.4 million in 1999 and the Company's operating expenses increased from $3.5 million in 1998 to $23.4 million in 1999. In 1998, gains related to the sale of investment securities produced net income because they exceeded these losses and expenses. In 1999, gains related to the issuance of shares by Breakaway Solutions, Inc. and VerticalNet partially offset the increased losses and expenses.
In addition, because of changes in ownership levels, the companies that are consolidated with Internet Capital Group will change from time to time and therefore reported revenues may include different partner companies from period-to-period. Through December 31, 1998 Internet Capital Group consolidated VerticalNet's financial statements. However, due to VerticalNet's IPO in February 1999, the Company's voting ownership interest decreased to below 50% and therefore VerticalNet is no longer consolidated with the Company's results. Internet Capital Group consolidated Breakaway Solutions for each of the quarters in the nine months ended September 30, 1999. However, due to Breakaway Solutions' IPO in October 1999, Internet Capital Group's voting ownership interest decreased to below 50% and therefore Breakaway is no longer consolidated in the fourth quarter, resulting in a decrease in sequential 1999 quarterly revenues. In the fourth quarter Animated Images, Inc., CyberCrop.com, EmployeeLife.com, ICG Commerce, Inc. and iParts were consolidated.
Internet Capital Group does not know if it will report net income in any period, and expects that it will report net losses in many quarters for the foreseeable future. Because Internet Capital Group acquires significant interests in business-to-business e-commerce companies, many of which generate net losses, Internet Capital Group has experienced, and expects to continue to experience, significant volatility in its quarterly results. While its partner companies have consistently reported losses, Internet Capital Group has recorded net income in certain periods due to one-time gains and other events incidental to its ownership interests in partner companies.
Highlights of 1999
1999 was a year of significant growth and development for Internet Capital Group. Some of the highlights include:
-- Initial Public Offering on August 4, 1999 raising $209 million.
-- Expansion of partner company network from 20 to 49, which consists of 30 market-makers and 19 enabling service providers.
-- Deployment of $572 million, $406 million in new acquisitions and $166 million in follow-on acquisitions.
-- Expansion of acquisition and operational capabilities with the addition of 48 professionals. Internet Capital Group ended 1999 with 70 employees.
-- Addition of four new strategic investors including IBM, Dell Computer, Ford and AT&T.
-- Follow-on offering on December 15, 1999 raising $1.4 billion.
-- Three partner companies, VerticalNet (VERT), US Interactive (USIT), and Breakaway Solutions (BWAY) completed initial public offerings, with a current value to Internet Capital Group as of February 23, 2000 of approximately $3.7 billion.
-- Increase in average ownership of new partner companies from 25% to 35%.
-- Expansion of Internet Capital Group operations to European market with the opening of the London office.
About Internet Capital Group
Internet Capital Group (http://www.internetcapital.com) is the leading B2B e-commerce company. It is an Internet holding company actively engaged in business-to-business e-commerce through a network of partner companies. It provides operational assistance, capital support, expertise, and a strategic network of business relationships intended to maximize the long-term market potential of more than 55 business-to-business e-commerce partner companies. Headquartered in Wayne, PA, Internet Capital Group has offices in San Francisco, Boston, Seattle and London.
Safe Harbor Statement under Private Securities Litigation Reform Act of 1995 The statements contained in this press release that are not historical facts are forward-looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future performance of our partner companies, acquisitions of interests in additional partner companies, additional financing requirements, the effect of economic conditions in the B2B e-commerce market and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission.
Internet Capital Group, Inc.
Consolidated Statements of Operations
(Unaudited)
Quarter Ended December 31, Year Ended December 31,
------------------------ -----------------------
1999 1998(1) 1999(1) 1998(1)
---------- ----------- ---------- ----------
Revenues $ 1,752,839 $ 1,272,970 $ 16,535,935 $ 3,134,769
Operating Expenses
Cost of revenue 731,249 1,743,828 8,155,843 4,642,528
Sales and
marketing - - - -
Selling, general
and
administrative 17,921,748 5,684,237 48,924,266 15,513,831
---------- ----------- ---------- ----------
Total operating
costs 18,652,997 7,428,065 57,080,109 20,156,359
---------- ----------- ---------- ----------
(16,900,158) (6,155,095) (40,544,174) (17,021,590)
Other income, net 20,382,224 6,968,856 67,383,415 30,483,177
Interest income 5,453,725 558,968 9,630,495 1,305,787
Interest expense (2,126,431) (148,032) (3,896,755) (381,199)
---------- ----------- ---------- ----------
Income before
income taxes,
minority interest
and equity loss 6,809,360 1,224,697 32,572,981 14,386,175
Income taxes 10,882,060 - 23,722,483 -
Minority interest 1,893,440 2,682,528 6,026,497 5,381,640
Equity loss (42,957,498) (1,899,153) (92,099,459) (5,868,887)
========== =========== ========== ==========
Net income (loss)$(23,372,638) $ 2,008,072 $(29,777,498) $13,898,928
========== =========== ========== ==========
Net income (loss)
per share
Basic $ (0.09) $ 0.02 $ (0.15) $ 0.12
Diluted $ (0.09) $ 0.02 $ (0.15) $ 0.12
Weighted average
shares outstanding
Basic 255,012,257 131,519,315 201,850,743 112,204,578
Diluted 255,012,257 131,519,315 201,850,743 112,298,578
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Supplemental
Information
(Unaudited) Quarter Ended December 31, Year Ended December 31,
------------------------ -----------------------
1999 1998 1999 1998
---------- ----------- ---------- ----------
Components of net
income (loss):
Partner Company
operations
Loss attributable
to consolidated
Partner
Companies $ (4,602,248) $ (2,577,330)$(11,318,289) $(8,212,635)
Loss attributable
to Partner
Companies accounted
for on the equity
method (42,957,498) (1,899,153)(92,099,459)(2)(5,868,887)
---------- ---------- ---------- ----------
Loss attributable
to Partner Company
operations (47,559,746) (4,476,483)(103,417,748) (14,081,522)
---------- ---------- ----------- ----------
General ICG
operations
General and
administrative (10,654,135) (995,674) (23,389,469) (3,512,586)
Other income, net 20,668,001 6,968,856 67,641,585 30,483,177
Interest income,
net 3,291,182 511,373 5,665,651 1,009,859
Income taxes 10,882,060 - 23,722,483 (2) -
---------- ---------- ----------- ----------
Income attributable
to General ICG
operations 24,187,108 6,484,555 73,640,250 27,980,450
---------- ---------- ----------- ----------
Net income (loss)$(23,372,638) $ 2,008,072$ (29,777,498)$ 13,898,928
========== ========== =========== ===========
(1) For comparative purposes, previously reported sales and
marketing expenses for both periods in 1998 and for the first six
months of 1999 have been reclassified as selling, general and
administrative expenses.
(2) For comparative purposes, income tax benefit of $5,731,401 for
the first 6 months of 1999 has been reclassified from Partner
Company operations to General ICG operations.
Internet Capital Group, Inc.
Schedule of Ownership Interests in Partner Companies
December 31, 1999
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MARKET MAKERS ICG OWNERSHIP
======================================================================
Vertical
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Animated Images 50%
Arbinet Communications 8%
AutoVia 16%
Bidcom 35%
Collabria 12%
CommerX 40%
ComputerJobs.com 33%
Courtlink 19%
CyberCrop.com 80%
Deja.com 31%
e-Chemicals 37%
eMerge Interactive 28%
EmployeeLife.com 52%
Internet Commerce Systems 43%
iParts 66%
JusticeLink 37%
MetalSite 44%
PaperExchange.com 24%
PlanSponsor Exchange 49%
RetailExchange.com 30%
Star-Cite! Solutions 43%
Universal Access 24%
USgift.com 38%
----------------------------------------------------------------------
Horizontal
----------------------------------------------------------------------
assetTRADE.com 17%
eMarket World 42%
NetVendor 27%
ONVIA.com 23%
ICG Commerce 60%
Residential Delivery Services 38%
VerticalNet 34%
======================================================================
ENABLING SERVICE PROVIDERS
======================================================================
Strategic Consulting and Systems Integration
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Benchmarking Partners 13%
Context Integration 14%
US Interactive 3%
----------------------------------------------------------------------
Software Providers
----------------------------------------------------------------------
Blackboard 29%
ClearCommerce 15%
Entegrity Solutions 11%
ServiceSoft Technologies 5%
Syncra Systems 35%
TRADEX Technologies 10%
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Outsourced Service Providers
----------------------------------------------------------------------
Breakaway Solutions 40%
CommerceQuest 28%
iSky 31%
Jamcracker 24%
LinkShare 34%
PrivaSeek 8%
SageMaker 21%
traffic.com 20%
United Messaging 37%
Vivant! 31%
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