Internet Capital Group Announces Second Quarter Results; Company
Deploys $95.6 Million in Business-to-Business E-Commerce Market
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WAYNE, Pa.--(BUSINESS WIRE)--Sept. 16, 1999--Internet Capital
Group, Inc. (NASDAQ:ICGE) today reported its results for the second
quarter ended June 30, 1999. During a very active quarter, the Company
acquired interests in eight new partner companies, expanding its
network to 35 companies. The Company also participated in twelve
follow-on financings in its existing partner companies. In addition,
the Company added several key people to its management team.
"This activity reflects the continuing emergence of the
business-to-business e-commerce market and our leading position in
that market," said Walter W. Buckley, president and chief executive
officer of Internet Capital Group.
Internet Capital Group reported a loss for the quarter of
$11,210,454 compared to net income of $6,743,695 a year ago and net
income of $8,869,509 for the six months ended June 30, 1999 compared
with net income of $16,012,736 in the comparable period last year.
Results for the second quarter and first half of 1998 and the first
half of 1999 include significant non-recurring gains from the sale of
securities by the Company and its partner company VerticalNet.
"Last year, and during the first quarter of 1999, we had one-time
non-recurring gains that produced the reported net income. While we
expect that we will occasionally have these types of gains, without
them, we will be reporting losses for the foreseeable future," said
Buckley. "This is primarily because our partner companies are
incurring losses as they build their infrastructures and develop their
respective markets. We believe that for now, our progress should be
measured by the effective deployment of our resources and in the
subsequent growth in value of our partner companies, rather than in
terms of net income."
Internet Capital Group Bolsters Balance Sheet
During the quarter the Company raised $90 million in the form of
convertible debt and established a $50 million credit facility with a
5-bank group led by PNC. Concurrent with the completion of the
Company's Initial Public Offering on August 5, 1999, which generated
cash of approximately $212 million after transaction costs and
expenses, the convertible debt automatically converted into common
stock. The IPO transaction is not reflected in the Company's cash
position at June 30, 1999.
Additional Financial Transactions Significantly Expand Partner
Network
The Company spent an aggregate of $95.6 million on acquisitions
and follow-on financings during the quarter. Internet Capital Group
acquired interests in eight new Partner companies, six of which are
market makers and two of which are infrastructure service providers.
The Company participated in twelve follow-on financings in existing
partner companies. The new companies acquired during the quarter are
as follows:
*T
Market Makers
-- Arbinet Communications provides an Internet-based trading
floor and clearinghouse for telecommunications carriers to
purchase bandwidth.
-- eMarketWorld provides industry specific Web-based
conferences and expositions that help businesses understand
the Internet.
-- Employeelife.com (formerly Pointment) provides
Internet-based solutions for employee health benefits
management across the health care industry.
-- iParts provides Internet-based sales and distribution of
electronic components.
-- PaperExchange provides Internet-based sales and distribution
of all grades of pulp and paper.
-- StarCite! provides Internet-based services for planning and
managing corporate meetings for event planners.
Infrastructure Service Providers
-- Tradex Technologies provides e-commerce application software
that enables enterprises to create on-line marketplaces and
exchanges.
-- United Messaging provides high performance electronic
messaging services for organizations with mission critical
e-mail networks.
*T
About Internet Capital Group
Internet Capital Group 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 35
business-to-business e-commerce partner companies.
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.
*T
Internet Capital Group, Inc.
Schedule of Ownership Interests in Partner Companies
June 30, 1999
Ownership
Market Makers Percentage
Distributor
CommerX, Inc. 42%
e-Chemicals, Inc. 36%
iParts 85%
Onvia.com, Inc. 20%
PaperExchange 27%
Universal Access, Inc. 26%
Network
Arbinet Communications, Inc. 16%
Autovia (Formerly RapidAutoNet) 15%
BidCom, Inc. 25%
Collabria Inc. 10%
ComputerJobs.com, Inc 33%
Employee Life.com (Formerly PointMent, Inc.) 50%
Internet Commerce Systems, Inc. 43%
Star-Cite! 43%
Community
Deja.com, Inc. 29%
eMarket World, Inc. 42%
PlanSponsor Exchange 24%
VerticalNet, Inc. 36%
Infrastructure Service Providers
Strategic Consulting and Systems Integration
Benchmarking Partners, Inc. 12%
Context Integration, Inc. 18%
US Interactive, Inc. 3%
Software Providers
Blackboard, Inc. 30%
ClearCommerce Corp. 15%
Entegrity Solutions 12%
ServiceSoft Technologies, Inc. 6%
Syncra Software, Inc. 35%
Tradex Technologies, Inc. 13%
Outsourced Service Providers
Breakaway Solutions, Inc. 53%
CommerceQuest, Inc. 29%
Linkshare Corporation 34%
Privaseek, Inc. 16%
SageMaker, Inc. 27%
Sky Alland Marketing, Inc. 31%
United Messaging, Inc. 41%
Vivant! Corporation Management 23%
Internet Capital Group, Inc.
Consolidated Statements of Operations
(Unaudited)
Quarter Ended June 30,
1999 1998
Revenues $ 4,479,859 $ 587,422
Operating Expenses
Cost of revenue 2,450,345 1,075,022
Sales and
marketing 742,837 1,679,469
General and
administrative 8,684,528 1,540,640
Total operating
costs 11,877,710 4,295,131
------------ ------------
(7,397,851) (3,707,709)
Other income, net 2,396,956 11,726,576
Interest income 974,605 247,041
Interest expense (953,272) (108,156)
Income before income
taxes, minority
interest and
equity loss (4,979,562) 8,157,752
Income taxes 5,133,539 --
Minority interest 1,302,243 976,314
Equity loss (12,666,674) (2,390,371)
Net Income
(loss) $(11,210,454) 6,743,695
Net Income (Loss)
per Share
Basic $ (0.13) $ 0.13
Diluted $ (0.13) $ 0.13
Weighted Average
Shares
Outstanding
Basic 88,595,892 51,081,728
Diluted 88,595,892 51,081,728
Six Months Ended June 30,
1999 1998
Revenues $ 7,590,894 $ 964,793
Operating Expenses
Cost of revenue 4,003,674 1,703,235
Sales and
marketing 857,252 2,614,403
General and
administrative 12,417,928 3,064,518
Total operating
costs 17,278,854 7,382,156
------------ ------------
(9,687,960) (6,417,363)
Other income, net 31,074,427 24,048,738
Interest income 1,284,340 303,441
Interest expense (967,028) (218,176)
Income before income
taxes, minority
interest and
equity loss 21,703,779 17,716,640
Income taxes 5,796,745 --
Minority interest 1,448,261 976,314
Equity loss (20,079,276) (2,680,218)
Net Income
(loss) $ 8,869,509 $ 16,012,736
Net Income (Loss)
per Share
Basic $ 0.11 $ 0.33
Diluted $ 0.11 $ 0.33
Weighted Average
Shares
Outstanding
Basic 80,533,103 48,161,518
Diluted 82,762,819 48,185,018
Supplemental Information
(unaudited)
Quarter Ended June 30,
1999 1998
Components of
net income
(loss):
Partner company
operations
Income (Loss)
attributable to
consolidated
Partner Cos $ (2,320,733) $ (1,895,198)
Loss attributable
to Partner Companies
accounted for on
the equity
method (7,598,479) (2,390,371)
Loss attributable to
Partner Company
operations (9,919,212) (4,285,569)
General ICG
operations:
General and
administrative (3,785,604) (821,906)
Other income, net 2,397,456 11,726,576
Interest
income, net 31,562 124,594
Income tax benefit 65,344 --
Income (Loss)
attributable to
General ICG
operations (1,291,242) 11,029,264
Net income (loss) $(11,210,454) $ 6,743,695
Six Months Ended June 30,
1999 1998
Components of
net income
(loss):
Partner company
operations
Income (Loss)
attributable to
consolidated
Partner Cos $ (2,720,920) $ (3,980,067)
Loss attributable
to Partner Companies
accounted for on
the equity
method (14,347,875) (2,680,218)
Loss attributable to
Partner Company
operations (17,068,795) (6,660,285)
General ICG
operations:
General and
administrative (5,518,732) (1,522,625)
Other income, net 31,081,921 24,048,738
Interest
income, net 309,771 146,908
Income tax benefit 65,344 --
Income (Loss)
attributable to
General ICG
operations 25,938,304 22,673,021
Net income (loss) $ 8,869,509 $ 16,012,736
*T
CONTACT: Internet Capital Group
Sherri Wolf, Investor Relations, 617/338-7171
or
Press Inquiries:
Michelle Strykowski, 415/356-1014
strykowm@fleishman.com
KEYWORD: PENNSYLVANIA
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
INTERACTIVE/MULTIMEDIA/INTERNET EARNINGS
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