Exhibit 99.1
(INTERNET CAPITAL GROUP LOGO)
FOR IMMEDIATE RELEASE
Investor inquiries: Media inquiries:
Karen Greene Michelle Strykowski
Internet Capital Group Internet Capital Group
Investor Relations Media Relations
610-230-4300 610-230-4330
IR@internetcapital.com mstrykowski@internetcapital.com
INTERNET CAPITAL GROUP ANNOUNCES FINANCIAL RESULTS FOR SECOND QUARTER 2003
Private Core Companies Continue to Make Steady Progress
- --------------------------------------------------------------------------------
Wayne, Pa - August 7, 2003 - Internet Capital Group, Inc. (Nasdaq: ICGE) today
reported its results for the second quarter ended June 30, 2003.
"Our private Core companies continue to make progress in a challenging market as
evidenced by the fact that companies like NBC, DuPont and Gap continue to select
and to leverage the solutions our partner companies are providing to increase
efficiencies and reduce costs within their organizations," said Walter Buckley,
ICG's chairman and CEO.
ICG FINANCIAL RESULTS
The Company reported a net loss for the quarter of $(26) million, or $(0.09) per
share versus a net loss of $(13) million, or $(0.05) per share, for the
corresponding 2002 period. The 2003 period was negatively impacted by $7 million
in impairment and restructuring charges. The 2002 period was positively impacted
by $63 million in gains associated with the repurchase of convertible notes,
offset by $34 million in impairment and restructuring charges. ICG reported
consolidated GAAP revenue of $24 million for the quarter versus $26 million for
the comparable 2002 period.
For the six month period ended June 30, 2003, ICG reported a net loss of $(44)
million, or $(0.16) per share versus a net loss of $(75) million, or $(0.27) per
share for the corresponding 2002 period. ICG reported consolidated GAAP revenue
of $49 million for the six months ended June 30, 2003 versus $50 million for the
corresponding 2002 period.
PRIVATE CORE COMPANY RESULTS
In an effort to illustrate macro trends within its private Core companies, ICG
provides an aggregation of revenue and net loss figures reflecting 100% of the
revenue and EBITDA for these companies. ICG does not own its Core companies in
their entirety and, therefore, this information should be considered in this
context. Total revenue and EBITDA, in this context, represents certain of the
financial measures used by the Company's management to evaluate the performance
for Core companies. EBITDA consists of earnings/(losses) before interest, tax,
depreciation and amortization; stock-based compensation, other non-cash and
non-recurring items have also been excluded. The Company's management believes
these non-GAAP financial measures provide useful information to investors,
potential investors, securities analysts and others so each group can evaluate
private Core companies' current and future prospects in the same manner as the
Company's management. A reconciliation to the most comparable GAAP measure is
included as an attachment to this release.
-more-
ICG Announces Second Quarter 2003 Results
"This quarter, the private Core group reported revenue growth and EBITDA
improvement, illustrating progress against our primary corporate goal of driving
growth and profitability at our Core companies," added Buckley.
Total revenue for ICG's private Core companies was $92 million for the quarter,
or a 6% increase over total revenue of $87 million during the first quarter of
2003, and a 7% increase over the second quarter of 2002 revenue of $86 million.
For the quarter, ICG's private Core companies also reported a total $(14)
million net loss as compared with a $(18) million net loss in the first quarter
of 2003 and a $(36) million net loss in the second quarter of 2002.
ICG's private Core companies also reported a total $(3) million EBITDA loss for
the quarter, excluding non-cash and non-recurring items, as compared with $(8)
million EBITDA loss in the first quarter of 2003 and a $(16) million EBITDA loss
in the second quarter of 2002.
Since last quarter, ICG's average primary ownership in its private Core
companies decreased from 48% to 44%, due primarily to funding of eCredit.com by
new investors.
CAPITAL ALLOCATION
As of June 30, 2003, cash on an ICG corporate basis totaled $65 million. The $19
million decrease from March 31, 2003 is comprised primarily of $10 million in
fundings to existing partner companies, $7.5 million in interest and other net
costs. As of August 6, 2003 ICG's cash totaled $60 million on a corporate basis.
ICG will host a webcast at 10:00am 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
http://www.internetcapital.com/investors/presentations 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 7, 2003 at 1:00pm until August 14, 2003 at 11:59pm.
To access the replay dial 800-642-1687 (domestic) or 706-645-9291
(international). The access code is 1823313. The replay and slide presentation
can also be accessed on the Internet Capital Group web site at
http://www.internetcapital.com/investors/presentations.
ABOUT INTERNET CAPITAL GROUP
Internet Capital Group, Inc. (http://www.internetcapital.com) is an information
technology company actively engaged in delivering software solutions and
services designed to enhance business operations by increasing efficiency,
reducing costs and improving sales results. ICG operates through a network of
partner companies that deliver these solutions to customers. To help drive
partner company progress, ICG provides operational assistance, capital support,
industry expertise, access to operational best practices, and a strategic
network of business relationships. Internet Capital Group is headquartered in
Wayne, Pa.
-### -
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 or dispositions of interests
in additional partner companies, debt obligations, additional financing
requirements, the effect of economic conditions generally and in the e-commerce
and information technology markets specifically, and uncertainties detailed in
the Company's filings with the Securities and Exchange Commission. These and
other factors may cause actual results to differ materially from those
projected.
INTERNET CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenue $ 24,002 $ 25,585 $ 48,941 $ 50,404
Operating Expenses
Cost of revenue 14,579 17,267 30,007 35,608
Selling, general and administrative 15,505 22,868 34,354 47,581
Research and development 3,833 6,931 9,294 13,419
Amortization of intangibles 2,002 3,131 4,176 6,231
Impairment related and other 2,993 7,274 2,179 8,764
--------- --------- --------- ---------
Total operating expenses 38,912 57,471 80,010 111,603
--------- --------- --------- ---------
(14,910) (31,886) (31,069) (61,199)
Other income (loss), net (2,413) 58,230 3,361 52,310
Interest income 372 962 814 2,360
Interest expense (4,622) (6,255) (9,290) (13,812)
--------- --------- --------- ---------
Loss before minority interest and equity loss (21,573) 21,051 (36,184) (20,341)
Minority interest 1,044 5,560 2,478 11,277
Equity loss (5,142) (34,666) (10,067) (55,273)
--------- --------- --------- ---------
Loss before discontinued operations (25,671) (8,055) (43,773) (64,337)
Loss on discontinued operations -- (5,084) -- (10,450)
--------- --------- --------- ---------
Net loss
$ (25,671) $ (13,139) (43,773) $ (74,787)
========= ========= ========= =========
Basic and diluted loss per share:
Loss before discontinued operations $ (0.09) $ (0.03) $ (0.16) $ (0.23)
Discontinued operations -- (0.02) -- (0.04)
--------- --------- --------- ---------
$ (0.09) $ (0.05) $ (0.16) $ (0.27)
========= ========= ========= =========
Shares used in computation of basic and diluted loss per share 270,525 281,534 270,068 280,405
========= ========= ========= =========
INTERNET CAPITAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
2003 2002
--------- ------------
ASSETS
Cash, cash equivalents and short-term investments $ 96,044 $ 136,844
Other current assets 33,070 39,387
--------- ---------
Total current assets 129,114 176,231
Assets of discontinued operations 4,105 5,746
Ownership interests in and
advances to Partner Companies 63,122 71,732
Goodwill 56,469 60,584
Available-for-sale securities 51 10,228
Other assets 29,603 41,725
--------- ---------
Total Assets $ 282,464 $ 366,246
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities $ 84,657 $ 102,663
Liabilities of discontinued operations 4,105 5,296
Minority interest and other liabilities 15,758 26,819
Convertible subordinated notes 271,114 283,114
--------- ---------
Total Liabilities 375,634 417,892
Stockholders' deficit (93,170) (51,646)
--------- ---------
Total Liabilities and Stockholders' Deficit $ 282,464 $ 366,246
========= =========
INTERNET CAPITAL GROUP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP CONSOLIDATED RESULTS
($ IN MILLIONS)
1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2Q 03
----- ----- ----- ----- ----- -----
REVENUE
TOTAL PRIVATE CORE COMPANY REVENUE(1) $ 80 $ 86 $ 90 $ 95 $ 87 $ 92
NON-CONSOLIDATED PARTNER COMPANIES (55) (60) (63) (64) (62) (68)
---- ---- ---- ---- ---- ----
CONSOLIDATED REVENUE $ 25 $ 26 $ 27 $ 31 $ 25 $ 24
==== ==== ==== ==== ==== ====
LOSS
TOTAL PRIVATE CORE COMPANY EBITDA LOSS(1) (2) $(21) $(16) $ (6) $ -- $ (8) $ (3)
INTEREST, TAXES, DEPRECIATION, AMORTIZATION, STOCK
BASED COMPENSATION AND NON-RECURRING ITEMS (45) (20)(3) (11) (15) (10) (11)
---- ---- ---- ---- ---- ----
TOTAL PRIVATE CORE COMPANY NET LOSS $(66) $(36) $(17) $(15) $(18) $(14)
AMOUNT ATTRIBUTABLE TO OTHER SHAREHOLDERS (47) (17) (4) (8) (7) (6)
---- ---- ---- ---- ---- ----
ICG'S SHARE OF NET LOSS OF PRIVATE CORE COMPANIES $(19) $(19) $(13) $ (7) $(11) $ (8)
ICG'S SHARE OF NET LOSS OF PUBLIC CORE COMPANIES (3) (19)(3) -- (1) (2) (2)
ICG'S SHARE OF NET LOSS OF EMERGING AND DISPOSED COMPANIES (14) (3) (4) 3 (1) --
DISCONTINUED OPERATIONS (5) (5) (5) 6 -- --
CORPORATE EXPENSES AND INTEREST EXPENSE, NET (14) (13) (10) (17) (9) (9)
OTHER INCOME (LOSS) AND IMPAIRMENTS (7) 46 45 (24) 5 (7)
---- ---- ---- ---- ---- ----
CONSOLIDATED NET INCOME (LOSS) $(62) $(13) $ 13 $(40) $(18) $(26)
==== ==== ==== ==== ==== ====
(1) Total Private Core Company figures are based on the financial statements
prepared by each partner company and, in some cases, adjustments and
estimates by Internet Capital Group. In addition, these figures are
preliminary in nature, are subject to change and may differ from
previously reported figures as a result of, among other things, changes in
the composition of the private core group of companies, changes to
reported figures by each partner company for any necessary corrections,
changes resulting from differing interpretations of accounting principles
upon review by the Securities and Exchange Commission, or changes in
accounting literature.
(2) EBITDA consists of earnings/(losses) before interest, tax, depreciation
and amortization; stock based compensation, other non-cash, and
non-recurring items have also been excluded. EBITDA is a commonly used
metric and presented here to enhance understanding of our partner company
operating results. EBITDA does not measure financial performance under
GAAP and other companies may present similarly titled measures that are
calculated differently. EBITDA is not an alternative to operating or net
income/(loss), as determined in accordance with GAAP, as an indicator of
performance, nor is it an alternative to cash flow from operations as
determined in accordance with GAAP, as a measure of liquidity.
(3) Includes our share of our consolidated and equity method companies'
impairment and restructuring charges totaling approximately $17 million.
INTERNET CAPITAL GROUP, INC.
JUNE 30, 2003
DESCRIPTION OF TERMS FOR CONSOLIDATED STATEMENTS OF OPERATIONS AND SUPPLEMENTAL
INFORMATION - CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
EFFECT OF VARIOUS ACCOUNTING METHODS ON OUR RESULTS OF OPERATIONS
The various interests that the Company acquires in its partner companies are
accounted for under three methods: consolidation, equity method and cost method.
The effect of a partner company's net results of operations on the Company's net
results of operations is generally the same under either the consolidation
method of accounting or the equity method of accounting, because under each of
these methods only our share of the earnings or losses of a partner company is
reflected in its net results of operations in the Consolidated Statements of
Operations. The applicable accounting method is generally determined based on
the Company's voting interest in a partner company.
CONSOLIDATION. Partner companies in which the Company directly or indirectly
possesses voting control or those where the Company has effective control are
generally accounted for under the consolidation method of accounting. Under this
method, a partner company's accounts (revenue, cost of revenue, selling, general
and administrative, research and development, impairment related and other,
amortization of intangibles, other income (loss) and interest income/expense)
are reflected within the Company's Consolidated Statements of Operations.
Participation of other partner company stockholders in the earnings or losses of
a consolidated partner company is reflected in the caption "Minority interest"
in the Company's Consolidated Statements of Operations. Minority interest
adjusts the Company's consolidated net results of operations to reflect only its
share of the earnings or losses of the consolidated partner company. As of June
30, 2003, the Company accounted for 3 of its partner companies under this
method.
EQUITY METHOD. Partner companies whose results the Company does not consolidate,
but over whom it exercises significant influence, are generally accounted for
under the equity method of accounting. Whether or not the Company exercises
significant influence with respect to a partner company depends on an evaluation
of several factors including, among others, representation on the partner
company's board of directors and ownership level, which is generally a 20% to
50% interest in the voting securities of the partner company, including voting
rights associated with the Company's holdings in common, preferred and other
convertible instruments in the partner company. Under the equity method of
accounting, a partner company's accounts are not reflected within the Company's
Consolidated Statements of Operations; however, its share of the earnings or
losses of the partner company is reflected in the caption "Equity Loss" in the
Consolidated Statements of Operations. As of June 30, 2003, the Company
accounted for 17 of its partner companies under this method.
COST METHOD. Partner companies not accounted for under either the consolidation
or the equity method of accounting are accounted for under the cost method of
accounting. Under this method, the Company's share of the earnings or losses of
these companies is not included in the Company's Consolidated Statements of
Operations. As of June 30, 2003, the Company accounted for 13 of its partner
companies under this method.
SUPPLEMENTAL INFORMATION - CONSOLIDATED STATEMENTS OF OPERATIONS
ICG'S SHARE OF NET LOSS OF CORE, EMERGING AND DISPOSED PARTNER COMPANIES
Represents ICG's share of the net loss of Core, Emerging and disposed Partner
Companies accounted for under the consolidated and equity method of accounting.
DISCONTINUED OPERATIONS
During the three months ended December 31, 2002, two of the Company's
consolidated Partner Companies, Delphion and Logistics, disposed of
substantially all of their assets. Accordingly, the operating results of these
two discontinued operations have been presented separately from continuing
operations.
CORPORATE EXPENSES, OTHER INCOME (LOSS) AND IMPAIRMENTS
General and administrative expenses consist of payroll and related expenses for
executive, operational, acquisitions, finance and administrative personnel,
professional fees and other general corporate expenses for Internet Capital
Group. Stock-based compensation is included and primarily consists of non-cash
charges related to certain compensation arrangements.
This caption also includes cash and non-cash severance and other charges related
to the restructuring of Internet Capital Group's operations to better align our
general and administrative expenses with the reduction in the number of Partner
Companies.
Other income (loss), net for the three months ended June 30, 2003 consists
primarily of Partner Company losses and impairments of $3.5 million offset by
gains on Partner Company dispositions of $1.0 million and gains on marketable
securities of $0.3 million. Other income (loss), net for the three months ended
June 30, 2002 consists primarily of a gain on debt extinguishment of $63.2
million and gain on a Partner Company distribution of $4.5 million offset by
$9.9 million of Partner Company impairments.
INTERNET CAPITAL GROUP, INC.
SCHEDULE OF OWNERSHIP INTERESTS IN PARTNER COMPANIES
JUNE 30, 2003 (1)
CORE PARTNER COMPANIES PRIMARY OWNERSHIP
- ---------------------- -----------------
PUBLIC CORE
eMerge Interactive, Inc. (Nasdaq: EMRG) 18%
Universal Access Global Holdings Inc. (Nasdaq: UAXS) 22%
Verticalnet, Inc. (Nasdaq: VERT) 22%
PRIVATE CORE
Blackboard, Inc. 15%
CommerceQuest, Inc. 80%
CreditTrade Inc. 30%
eCredit.com, Inc. 42%
Freeborders, Inc. 48%
GoIndustry AG 31%
ICG Commerce Holdings, Inc. 75%
Investor Force Holdings, Inc. 38%
iSky, Inc. 25%
LinkShare Corporation 40%
Marketron International, Inc. 40%
OneCoast Network Holdings, Inc. 97%
StarCite, Inc. 22%
Syncra Systems, Inc. 31%
EMERGING PARTNER COMPANIES PRIMARY OWNERSHIP
- -------------------------- -----------------
Agribuys, Inc. 27%
Anthem/CIC Ventures Fund LP 9%
Arbinet-thexchange Inc. 2%
Captive Capital Corporation 5%
Citadon, Inc. 2%
ClearCommerce Corporation 11%
ComputerJobs.com, Inc. 46%
Co-nect Inc. 36%
Emptoris, Inc. 11%
Entegrity Solutions Corporation 2%
FuelSpot.com, Inc. 9%
Jamcracker, Inc. 2%
Mobility Technologies, Inc. 3%
Onvia.com, Inc. (Nasdaq: ONVI) 22%
Tibersoft Corporation 5%
(1) This schedule excludes OnMedica Group Limited, which was included as a
Partner Company at June 30, 2003 but was subsequently sold. In addition,
Universal Access Global Holdings Inc. closed a $16mm equity investment in July
which diluted our primary ownership to approximately 9% and Verticalnet Inc.
completed a debt repurchase on July 31, 2003, which diluted our ownership to
approximately 16%.