look like icge not trading after hour ...
Wednesday November 8, 4:24 pm Eastern Time
Press Release
Internet Capital Group Announces Third Quarter
Results
ICG Realigns Resources Around Key Partner Companies and Takes Decisive Actions to Reinforce Its Financial Strength
WAYNE, Pa.--(BUSINESS WIRE)--Nov. 8, 2000-- Internet Capital Group, Inc. (NASDAQ:ICGE - news) today
reported its results for the third quarter ended September 30, 2000.
``As ICG and the B2B market continue to grow and evolve, ICG is focusing human and capital resources on partner
companies with the most potential to return near-term value for our shareholders. We are also taking decisive action
to strengthen our financial position while continuing to build on our proven track record of value creation,'' said
Walter Buckley, president and CEO of ICG.
Intensifying focus and discipline
``Building on our key theme last quarter, in the third quarter ICG intensified its financial and human resources on the
most promising companies in its network. We believe that giving more attention to a smaller number of companies
will fuel the development of our leading partner companies, and, in turn, generate greater shareholder value,'' said
Buckley.
ICG has completed a rigorous process to review its companies using a stringent set of criteria. This exercise has
identified fifteen high potential, private companies in the U.S. in which ICG has deployed $1.7 billion of capital.
In addition, ICG will continue to support its network of private U.S. companies with an emphasis on those that are
developing and close to achieving these criteria but currently fall short of one or more of these disciplined
measurements. Partner companies that do not meet these criteria over time, or where ICG does not own a meaningful
stake, will be managed to maximize value.
For example, ICG sold its stake in Centrimed to an Internet-based health care trading exchange called Global Health
Care Exchange (GHCX). Centrimed will be the chosen technology platform to enhance supply chain efficiency for the
online health care industry exchange. ICG received $15.2 million in September 2000 and $9.7 million in October of
2000 for its $8.0 million stake in Centrimed. The Company could receive additional cash contingent upon meeting
certain levels of performance.
The Company also announced today actions to strengthen its position and to reallocate resources, including a
workforce reduction of 35%, a facilities reduction and fixed asset write-downs. These actions will result in a one-time
fourth quarter charge of approximately $25-30 million, of which $4-5 million will be cash.
ICG also announced its plans to move its geographic operations in Europe and Japan into separate entities that will
seek external financing and in which ICG will continue to hold a substantial stake.
Financial Strength and Flexibility
``As the B2B market evolves, we intend to manage our business with a high level of financial discipline and rigor.
We will maintain a solid position enabling us to support the development of our leading partner companies,'' said Ed
West, Chief Financial Officer of Internet Capital Group.
During the third quarter, the Company spent a total of $120 million in cash for new name and follow-on acquisitions.
Cash, short term investments and available for sale securities totaled $513.9 million at September 30, 2000 on a
separate company basis.
``With more than $500 million in liquid resources at quarter end, access to multiple financing sources, and most
importantly the ability to monetize non-strategic assets, we have significant financial flexibility going forward.'' said
West.
Acquisition Highlights
During the quarter, ICG deployed $26.8 million of cash and $13.6 million in ICG stock on new name acquisitions,
including eMarket Capital, Fuelspot, Foods Infomart, OnMedica, and Sourceree. Additionally ICG spent $93.2 million
in cash and $197.8 million in ICG stock for 21 follow-on acquisitions in its existing partner companies, increasing its
ownership position in many of these.
Partner Company Highlights
One of the measures of ICG's progress is the revenue growth of its partner companies. On a pro-forma unaudited
basis, the aggregate reported revenues of all of ICG's partner companies grew approximately 630%, from $81.5 million
in the third quarter of 1999 to $594.7 million in the third quarter of 2000.
Excluding revenues from reselling, proforma unaudited aggregate reported revenues of all of ICG's partner
companies grew 353%, from $56.8 million in the third quarter of 1999 to $257.5 million in the third quarter of 2000.
``ICG has a proven track record of value creation from both public and private market liquidity events and I am
confident that by continuing to concentrate on our key companies with financial and operating discipline as our
guide, we will create significant value for ICG shareholders,'' said Buckley.
Quarterly Financial Results
For the quarter ended September 30, 2000, the Company reported a loss of $263.9 million or $.94 per diluted share,
which includes the net effect of gains principally from the sales of ownership interests and losses from impairment
charges resulting from the write down of certain assets, compared with a loss of $15.3 million or $.07 per diluted
share in the corresponding period in 1999.
For the nine months ended September 30, 2000, ICG reported a loss of $98.7 million or $.36 per diluted share as
compared with a loss of $6.4 million or $.03 per diluted share a year ago.
This quarter, of ICG's 80 partner companies, 14 are consolidated, 48 are accounted for under the equity method and
18 are accounted for under the cost method of accounting.
ICG's strategy is to acquire and build business-to-business e-commerce companies. Because many of these
companies are in the early stage of their development, they have been and are expected to continue to generate
losses.
The performance of these partner companies, coupled with the occasional and unplanned nature of the gains related
to ICG's ownership in them, will most likely continue to result in wide fluctuations of the Company's quarterly
results.
About Internet Capital Group
Internet Capital Group (http://www.internetcapital.com) is the leading B2B e-commerce company. It is an Internet
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 70 business-to-business e-commerce partner
companies. Headquartered in Wayne, Pa, Internet Capital Group has offices in San Francisco, Boston, London,
Munich, Paris, and Tokyo.
ICG will host a Web cast at 5:00 pm EST to discuss third quarter results. You can access the web cast at
www.vcall.com.
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, in thousands)
Quarter Ended Nine Months Ended
Sept. 30, Sept. 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues $ 16,468 $ 7,192 $ 21,673 $ 14,783
Operating Expenses
Cost of revenue 9,843 3,421 12,445 7,425
Research and
development
expenses 14,682 - 25,840 -
Purchased
in-process
research and
development 620 - 11,470 -
Selling, general
and
administrative 89,088 15,622 186,896 27,308
Amortization of
goodwill and
intangibles 203,950 8,327 336,718 14,817
--------- --------- --------- ---------
Total operating
costs 318,183 27,370 573,369 49,550
--------- --------- --------- ---------
(301,715) (20,178) (551,696) (34,767)
Other income
(expense), net (3,980) 15,927 659,205 47,001
Interest income 11,187 2,892 43,502 4,177
Interest expense (10,037) (803) (31,481) (1,770)
--------- --------- --------- ---------
Income (loss)
before income
taxes, minority
interest and
equity loss (304,545) (2,162) 119,530 14,641
Income taxes 132,228 7,044 15,367 12,840
Minority interest 29,261 2,685 46,538 4,133
Equity loss (120,797) (22,841) (280,179) (38,019)
--------- --------- --------- ---------
Net loss $(263,853) $ (15,274) $ (98,744) $ (6,405)
========= ========= ========= =========
Net loss per Share
Basic $ (0.94) $ (0.07) $ (0.36) $ (0.03)
Diluted $ (0.94) $ (0.07) $ (0.36) $ (0.03)
Weighted Average
Shares
Outstanding
Basic 281,271 232,827 271,361 185,104
Diluted 281,271 232,827 271,361 185,104
Supplemental Information
(Unaudited, in thousands) Quarter Ended Nine Months Ended
Sept. 30, Sept. 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Components of net
loss:
Partner Company
operations
Loss attributable
to consolidated
Partner
Companies $(144,047) $ (3,995) $(218,177) $ (6,716)
Loss attributable
to Partner
Companies
accounted for on
the equity
method (219,354) (29,063) (483,552) (49,142)
--------- --------- --------- ---------
Loss attributable
to Partner
Company
operations (363,401) (33,058) (701,729) (55,858)
--------- --------- --------- ---------
General ICG
operations
General and
administrative (22,965) (7,216) (66,163) (12,735)
Research and
development (2,129) - (11,090) -
Other income
(expense), net (3,816) 15,892 659,367 46,974
Interest income
(expense), net (3,770) 2,064 6,274 2,374
Income taxes 132,228 7,044 14,597 12,840
--------- --------- --------- ---------
Income
attributable to
General ICG
operations 99,548 17,784 602,985 49,453
--------- --------- --------- ---------
--------- --------- --------- ---------
Net loss $(263,853) $ (15,274) $ (98,744) $ (6,405)
========= ========= ========= ========= |
