Internet Capital Group Announces Financial Results for Second Quarter 2004
Thursday August 5, 8:30 am ET
Net Loss, Excluding Unusual Items, Decreases by 52%
WAYNE, Pa.--(BUSINESS WIRE)--Aug. 5, 2004--Internet Capital Group, Inc. (Nasdaq:ICGE - News) today reported its results for the second quarter ended June 30, 2004.
"Closing our new financing and redeeming our 5.5% outstanding convertible debt this quarter began a new chapter in ICG's history - one with a sound financial position and partner company progress," said Walter Buckley, ICG's Chairman and Chief Executive Officer. "Our Core partner companies continue to execute against their goals, as demonstrated by improving operating performance and the completion of Blackboard's IPO."
Highlights of the second quarter are as follows:
Consolidated net loss for the second quarter of 2004 was $(1.9) million, compared with $(25.7) million in the prior year. Unusual items reported in the second quarter results totaled a net gain of $6.9 million mostly related to asset dispositions. The prior year quarter was impacted by $7.3 million in impairment and restructuring charges. Excluding unusual items, net loss for the second quarter of 2004 was $(8.8) million versus $(18.4) million for the 2003 period, an approximate reduction of 52%.
ICG completed the issuance of $60 million of 5% convertible notes due 2009 that are convertible into common stock at a price of $9.108 per share. A portion of the net proceeds was used to redeem the remaining $39.1 million in outstanding 5.5% convertible notes, and the balance was added to ICG's cash.
ICG implemented a 1-for-20 reverse split of its outstanding common stock and regained compliance with all Nasdaq SmallCap listing requirements.
Blackboard completed its initial public offering in June. ICG now records the value of this investment as an asset on its balance sheet. At June 30, 2004, the value of ICG's Blackboard shares was $58.6 million.
ICG Financial Results
ICG reported consolidated revenue of $12.5 million and a net loss of $(1.9) million, or $(0.05) per share, for the second quarter of 2004. Consolidated revenue was $18.1 million and net loss was $(25.7) million, or $(1.90) per share, for the comparable 2003 period. The decrease in revenue is primarily due to the loss of a significant customer and the deconsolidation of a partner company.
As a result of the Blackboard IPO, ICG will now record the fair market value of its investment on its balance sheet. Blackboard will separately report on its operations as a public company, and therefore will not be included in Core partner company results.
ICG has ownership interests in ten private companies that are classified as Core companies. Two of these companies are consolidated, ICG Commerce and CommerceQuest. The other eight companies are accounted for under the equity method and include CreditTrade, eCredit, Freeborders, GoIndustry, Investor Force, LinkShare, Marketron and StarCite. The comparative operating results of the ten Core companies, based on ICG's current accounting methods for their results, are summarized below:
Three months ended June 30,
------------------------------------------------------------
2004 2003
----------------------------- ------------------------------
Consolidated Equity Consolidated Equity
-------------- -------------- -------------- ---------------
Revenue $ 12,519 $ 41,319 $ 16,918 $ 33,755
EBITDA (a) (1,887) 223 (3,920) (543)
Net loss (2,888) (4,106) (6,423) (4,169)
(a) EBITDA represents earnings/(losses) before interest, tax,
depreciation, and amortization of intangibles. A reconciliation of
EBITDA to the most comparable GAAP measure is included as an
attachment to this release.
"On an overall basis, we are satisfied with the operating performance of our ten Core private companies during the second quarter and first half of 2004," said Anthony Dolanski, Chief Financial Officer. "Customer activity is encouraging and spending has been selectively increased to extend services and sales."
ICG's consolidated cash and short-term investment balance at June 30, 2004 was $93.3 million and the value of its marketable securities was $64.6 million. The Company ended the quarter with stockholders' equity of $182 million.
ICG will host a webcast at 10:00 am ET today to discuss results. As part of the live webcast for this call, ICG will post a slide presentation to accompany the prepared remarks. To access the webcast, go to internetcapital.com and click on the link for the second quarter conference call webcast. Please log on to the website approximately ten minutes prior to the call to register and download and install any necessary audio software. The conference call is also accessible through listen-only mode at 877-211-0292. The international dial in number is 706-679-0702. The pass code to the call is "Second Quarter Earnings."
For those unable to participate in the conference call, a replay will be available beginning August 5, 2004 at 11:00 am until August 16, 2004 at 11:59 pm. To access the replay, dial 800-642-1687 (domestic) or 706-645-9291 (international). The access code is 8746779. The replay and slide presentation can also be accessed on the Internet Capital Group web site at internetcapital.com. |
