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Filed by divine, inc. pursuant to Rule 425 under the Securities Act of 1933
and deemed filed purusuant to Rule 14a-12 under the Securities Exchange Act
of 1934
Subject Company: eshare communication, Inc.
Registration No. 333-66488
[divine LOGO] NEWS RELEASE
www.divine.com NASDAQ : DVIN
--------------
<Table>
INVESTMENT PROFESSIONALS: INDIVIDUAL INVESTORS: MEDIA INQUIRIES: INTERNATIONAL MEDIA:
Paul Scheeler Brenda Lee Johnson Susan Burke / Anne Schmitt Chris Blaik
Director of Investor Relations Investor Relations Manager Direct: 773.394.6746 / 6827 Direct: +44 [0] 20 7070 9520
Direct: 773.394.6826 Direct: 773.394.6873 susan.burke@divine.com Chris.blaik@divine.com
paul.scheeler@divine.com brenda.johnson@divine.com anne.schmitt@divine.com
</Table>
FOR IMMEDIATE RELEASE
THURSDAY, AUGUST 9, 2001
DIVINE, INC. REPORTS $61 MILLION IN SECOND QUARTER REVENUES
--------------------
- OVER 500 CUSTOMERS, FOCUSED ON GLOBAL 2000 AND HIGH GROWTH COMPANIES
- $202 MILLION IN CASH AND CASH EQUIVALENTS AS OF JUNE 30
- MANAGEMENT REAFFIRMS PROFITABILITY TARGET OF THIRD QUARTER 2002
CHICAGO - AUGUST 9, 2001 - DIVINE, INC., (NASDAQ: DVIN), today reported results
for the second quarter ended June 30, 2001, including revenues of $61.3 million.
divine's 528% sequential quarterly revenue increase was achieved primarily as a
result of its acquisition and integration of certain marchFIRST assets and
operations, which closed on April 2, 2001. The marchFIRST acquisition accounted
for approximately 92% or $56.1 million of second quarter revenues, as well as
significant expansion in divine's customer base and global sales and solutions
delivery organization.
divine focuses on Global 2000 and high growth middle market firms and currently
serves a customer base exceeding 500 companies. divine provides a combination of
solution-based services, software and hosting/managed applications that enable
businesses to increase efficiency, generate revenue, advance their brand, and
build customer loyalty. These solutions allow businesses to manage internal and
external knowledge resources, create meaningful interaction and collaboration
within business communities and deploy cutting-edge technologies that are fully
integrated with core business systems.
<Table>
- ------------------------------------------------------------------------------------------------------------------------
SUMMARY OF SECOND QUARTER FINANCIAL RESULTS
(dollars in thousands except share and per share amounts)
(unaudited)
---------------------------------- ------------------------------------------
FOR THE THREE MONTHS ENDED
-----------------------------------------------------------------------------
SOFTWARE, SERVICES & SOFTWARE, SERVICES & DIVINE, INC.
HOSTING/MANAGED APPS HOSTING/MANAGED APPS
- -----------------------------------------------------------------------------------------------------------------------
JUNE 30, MARCH 31, JUNE 30, 2001 JUNE 30,
2001 2001 2000
- -----------------------------------------------------------------------------------------------------------------------
Total Revenues $ 61,281 $ 7,633 $ 61,281 $ 12,092
Total Operating Expenses $ 104,390 $ 38,183 $ 106,465 $ 72,317
Operating Loss $ (43,109) $ (30,550) $ (45,184) $ (60,225)
Total Non-Cash Expenses $ 10,770 $ 5,681 $ 17,047 $ 26,110
Net loss (excluding preferred/deemed $ (38,545) $ (75,383)
Net Loss Per Common Share $ (0.27) $ (0.91)
Shares Used in Computing Net Loss Per 144,569,725 92,800,311
Share
- ------------------------------------------ ----------------------- ------------------------ -------------- -------------
</Table>
================================================================================
"THE SECOND QUARTER WAS KEY FOR DIVINE, NOT JUST IN TERMS OF OUR FIVE-FOLD
REVENUE GROWTH, BUT BECAUSE WE MANAGED TO EFFECTIVELY INTEGRATE THE
BUSINESSES WE BUILT OVER THE LAST 18 MONTHS WITH THE ACQUISITIONS WE CLOSED
IN THE QUARTER. THESE ACQUISITIONS GO A LONG WAY TO FILLING OUT OUR STRATEGIC
VISION FOR DIVINE."
================================================================================
-- ANDREW "FLIP" FILIPOWSKI, DIVINE CHAIRMAN & CEO
================================================================================
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SECOND QUARTER FINANCIAL RESULTS
To highlight the progress that divine is making in executing its business
strategy, in addition to reporting results on a consolidated basis, divine is
providing separate financial information across two divisions: 1) software,
services, and hosting/managed applications; and 2) divine interVentures,
primarily comprised of investments in early stage companies. This change in
presentation renders same-quarter comparisons less meaningful and so divine is
providing sequential quarterly comparisons in this release in addition to the
year-ago periods included in divine's Consolidated Statements of Operations.
For the second quarter ended June 30, 2001, divine reported consolidated
revenues of $61.3 million, a 528% sequential quarterly increase from revenues of
$9.8 million in the first quarter 2001. Net loss for the second quarter was
$38.5 million or ($0.27) per common share computed on 144.6 million weighted
average shares outstanding, compared to a net loss of $65.6 million or ($0.49)
per common share computed on 134.6 million weighted average shares outstanding
for the first quarter 2001. The increase in the number of outstanding shares is
primarily attributable to the issuance of stock for acquisitions. The second
quarter 2001 loss included non-cash expenses totaling $17.0 million, comprised
of $3.9 million of impairment charges, $8.2 million of amortization of goodwill
and other intangibles, $2.2 million of stock-based compensation expense and $2.7
million of depreciation.
divine's software, services and hosting/managed applications revenues for the
second quarter of 2001 were $61.3 million, versus $7.6 million in revenues
reported in the first quarter of 2001, predominantly reflecting the revenue
contribution from the marchFIRST acquisition. The attributable net operating
loss was $43.1 million, resulting primarily from costs associated with divine's
continuing development of a global sales and solutions delivery organization
capable of supporting additional software, services and customers.
At June 30, 2001, on a separate company basis not including consolidated
companies in the divine interVentures portfolio, divine had a total of
approximately $202.6 million in cash, cash equivalents and available for sale
securities, compared with $224.3 million at March 31, 2001.
In addition to divine's software, services and hosting/managed applications
business, divine has ownership interests in certain associated companies,
consisting principally of early-stage businesses, which comprise its divine
interVentures portfolio. The carrying value of the divine interVentures
portfolio reflected on the divine's balance sheet at June 30, 2001, is
approximately $23.5 million. divine currently has no plans to make additional
investments in this portfolio. For additional information, please refer to
divine's filings with the SEC.
DIVINE MANAGEMENT COMMENTS
STRATEGIC OVERVIEW - CEO ANDREW "FLIP" FILIPOWSKI
"The second quarter was key for divine, not just in terms of our five-fold
revenue growth, but because we managed to effectively integrate the businesses
we built over the last 18 months with the acquisitions we closed in the quarter.
These acquisitions go a long way to filling out our strategic
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vision for divine," said Andrew "Flip" Filipowski, divine Chairman and CEO.
"Each of our acquisitions is designed to further divine's strategy, which is to
assist enterprises in managing their collaboration and interaction with
partners, suppliers and customers. We are pleased with the rapid integration of
our acquisitions and proud of our team which is working hard to integrate the
product offerings and making great progress. Already this effort has simplified
and helped to cut the cost of doing business for our customers."
FINANCIAL OVERVIEW - CFO MICHAEL CULLINANE
"divine is in a very strong financial position and we remain committed to
achieving profitability in Q3 2002," said divine Chief Financial Officer Michael
Cullinane. "At June 30, divine had $202 million in cash and cash equivalents
which, together with the receivables we acquired in the marchFIRST transaction,
provide us sufficient funds to execute our business model. We plan to
aggressively pursue acquisitions because we believe current market conditions
present an opportunity to rapidly build out our software, services, and
hosting/managed applications business at a lower cost basis than it would be
possible to build from scratch."
SERVICES OVERVIEW - ED SZOFER, PRESIDENT, DIVINE PROFESSIONAL SERVICES
"Shortly after integrating our legacy marchFIRST organization with divine, we
began to score major account wins, in addition to successfully bringing over
nearly 350 marchFIRST clients," said Ed Szofer, President of divine Professional
Services. "I have personally visited over 100 of our clients during these first
four months, and the fact that we experienced practically no client attrition is
a testament to the professionalism and work ethic of our people and how they
continued to serve our clients during a difficult time.
"What makes our progress even more noteworthy is that at the same time, we've
consolidated space in several of our regional office locations, transitioned to
new payroll and expense systems, produced new sales collateral, and integrated
most of our service offerings with divine's rapidly growing product portfolio.
During my twenty years in this business, I have never seen as many customer
relationships smoothly transitioned from one organization to another in such a
short period of time. It also illustrates the dedication and hard work of the
divine organization, which has embraced us as members of a growing family that
we are thrilled to be a part of."
DIVINE DEVELOPMENTS
ACQUISITIONS AND DEFINITIVE AGREEMENTS
The following are summaries of previous announcements.
- - In August, divine acquired FRACTA NETWORKS, INC. , a provider of personal
content management solutions. Founded in March 2000 and based in Austin,
Texas, privately held Fracta Networks has developed FractaNet(TM), an
application that allows users to easily capture portions of documents,
spreadsheets or Web sites. The acquisition of Fracta Networks will expand
divine's
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suite of personal information management tools, which provide a single
point of access for an organization's critical applications, as well as
internal and external information.
- - In July, divine announced its intent to acquire the assets of INTIRA
CORPORATION, a high-end provider of outsourced infrastructure services,
subject to bankruptcy court approval. divine plans to acquire certain fixed
assets, accounts receivable, Intira infrastructure and technology, certain
of Intira's data centers including locations in Pleasanton, Calif., and St.
Louis, as well as the right to the assignment of customer contracts and the
right to offer employees positions with divine. The acquisition is expected
to add more than 30 customers and generate approximately $1.8 million in
monthly recurring revenue while expanding divine's capacity to host and
manage sophisticated, enterprise-level applications.
- - In July, divine signed a definitive agreement to acquire ESHARE
COMMUNICATIONS, INC., a leading provider of customer interaction management
(CIM) solutions, in a stock-for-stock merger agreement expected to close by
mid-October 2001. eshare has a 20-year history of developing solutions that
help businesses establish and maintain high-quality relationships with
their customers through the phone, email and the Web - enabling divine to
offer customers the ability to facilitate and enhance relationships across
the corporate enterprise. eshare reported 2000 revenues of nearly $84
million and has more than 2,500 customer sites in over 40 countries,
including eight of the top ten firms in the Fortune 50. eshare is based in
Norcross, Ga. and has offices in New York, Los Angeles, Chicago, Leesburg,
Va., and international locations in France and the U.K.
- - In July, divine announced a definitive agreement to acquire ROWECOM, INC.,
in a stock-for-stock transaction expected to close by mid-October 2001.
Founded in 1994 and based in Westwood, Mass., RoweCom is a leading global
provider of sophisticated tools and client services for purchasing and
managing the acquisition of magazines, newspapers, journals and e-journals,
books and other knowledge resources. RoweCom's content offerings and
procurement technology are expected to become key components of divine's
knowledge content solution, providing a single source for electronic
procurement of published information in hard-copy and digital form. RoweCom
has offices in Canada, the U.K., France, Spain, Australia, Taiwan/Hong Kong
and Korea, and a regional office in New Jersey. RoweCom's clients range
from academic libraries to Fortune 1000 firms, and could include any
enterprise with intensive knowledge requirements and high-volume purchases.
- - In July, divine acquired the 67 percent of the outstanding shares of EMICOM
GROUP that it did not already own in exchange for 13.8 million shares of
divine common stock. Founded in March 2000, Ramat Gan, Israel-based Emicom
Group specializes in developing software and communications infrastructure
start-up companies with four such firms currently funded. Emicom Group
provides divine additional uncommitted cash reserves, an operating base in
the strategically important Israeli high tech market, and a channel for
divine's continued international expansion.
- - In May, divine acquired DATABITES, INC., an award-winning software
development company that develops both wireless and wired Web content
delivery applications. Founded in 1999, DataBites develops and markets
technology that allows users to capture content from any Web-based
application, intranet, or Web page, and display that content on any
Internet-enabled device. divine is incorporating DataBites' Internet
Content Recorder(TM) (ICR(TM)) and MobileBites(TM)
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technologies into its enterprise portal solutions, enabling divine portal
customers to simply and instantly personalize their portals and extend them
to mobile devices.
- - In April, divine closed its acquisition of CERTAIN ASSETS FROM MARCHFIRST,
INC., consisting primarily of the operations of the former Whittman-Hart.
The transaction provided divine with approximately 2,000 employees and 350
customers predominantly consisting of Fortune 1000 and high growth middle
market companies. Ed Szofer, chief development officer of marchFIRST and
the president of Whittman-Hart prior to the acquisition of USWeb last year,
was named President of divine Professional Services. In addition, divine is
in the process of closing its acquisition of marchFIRST's HostOne
application hosting unit, which will become part of divine's managed
application business.
STRATEGIC ALLIANCES AND BUSINESS AGREEMENTS
- - In July, divine enhanced its strategic alliance with COMPUTER ASSOCIATES,
originally announced in February, with the integration of divine's
Enterprise Content Center and applications with CA's Jasmine Portal. The
integrated technology was unveiled at the 10th annual CA World e-business
conference in Orlando, attended by 8,000 IT professionals, and resulted in
being awarded one of four CA World Spirit Awards for best overall show
presence. This is divine's first corporate alliance touching all spheres of
its business.
- - divine's Value-Added Reseller (VAR) group finalized agreements with
HEWLETT-PACKARD, IBM, DELL, COMPAQ, ORACLE and EMC during the quarter,
giving divine the ability to bring significant additional value to its
professional services, software and managed applications sales. These new
partnerships have already resulted in a number of customer wins.
- - In June, divine rolled out a reseller partnership with OUTTASK, INC.,
allowing divine's sales force to offer a divine-deployed suite of
pre-integrated, hosted CRM, SFA, T&E, HR and Financial Management solutions
from leading vendors such as Siebel, Great Plains, and WebEx. Outtask's
applications suites deliver immediate cost-savings and efficiencies that
take months to implement under traditional deployments.
- - In July, divine announced an agreement with ESHARE COMMUNICATIONS, INC.,
allowing divine's global sales and solutions delivery organizations to sell
eshare's premier predictive dialer and voice platform which features the
call center industry's most advanced and flexible dialer technology, as
well as eshare's other customer interaction management (CIM) solutions.
- - In July, divine established a reseller agreement with ROWECOM, INC. that
allows the divine sales organization to sell RoweCom products. RoweCom
forms the foundation for the content component of divine's overall strategy
to dominate enterprise content management.
- - In May, BEA SYSTEMS selected divine's Professional Services organization to
participate in its cooperative agreement with Dell to preload BEA
WebLogic(R) Server - believed to be the world's #1 Java application server
- on Dell PowerEdge servers as part of an initiative to deliver
"ready-for-e-business" application server solutions to enterprise
customers.
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NEW SOLUTIONS, RELEASES AND RECOGNITIONS
- - DIVINE RELEASED ITS ENTERPRISE PORTAL V4.4 as part of a process to unify
divine's portals and product suite. This release features new content
partnerships, third-party application integration, and core components
including: instant messaging, financial applications, Fame iChartz,
Microsoft's NetMeeting, GeoDynamics Energy Mapping, S&P Insurer Ratings and
SmartMoney Market Maps.
- - DIVINE'S PRODUCT SOLUTIONS GROUP LAUNCHED ITS RIGHTSTART(TM) IMPLEMENTATION
SERVICES OFFERING, which is solely dedicated to servicing divine's product
suite of effective planning, installation, configuration and training
specific to divine software products. Working with clients at their
locations, divine's certified product specialists can help the client
customize and integrate divine solutions into their enterprise systems by
tapping our experience with the latest web services technologies.
- - DIVINE INTRODUCED FINANCIAL MARKETS INSIGHT(TM) AND INVESTMENT BANKING
INSIGHT(TM) PORTALS - its two newest web-based portal solutions for the
financial services industry. The portals provide financial services
professionals with access to applications and premium content from sources
like Thomson Financial, Reuters, Standard & Poor's, Fame, Edgar Online,
OneSource Information Services and Zacks Investment Research, while
enabling firms to control costs and track usage.
- - DIVINE INDIA LIMITED WAS CERTIFIED ISO 9001:2000 COMPLIANT, under a new ISO
standard which brings Customer Focus and Continuous Improvement elements to
the existing ISO 9001:1994 standard, against which divine India was
certified last year. divine India provides off-shore software development
services for divine's internal offerings and numerous divine customer
projects.
- - DIVINE'S CINCINNATI AND DETROIT OFFICES WON AN ADDY AWARD, one of the
advertising industry's top honors, presented by the American Advertising
Federation, for their branding work on www.frontgate.com. Frontgate is a
leading marketer of luxury indoor and outdoor household goods, and the
award recognizes the expansion of the site's e-commerce capabilities.
BOARD OF DIRECTORS UPDATE
- - In June, KEVIN NATER OF DELL COMPUTER CORPORATION was added to divine's
Board of Directors. Mr. Nater currently serves as vice president and
treasurer for Dell, as well as vice president of Dell Ventures and on the
Board of Dell Financial Services. Previously, he was assistant treasurer
and vice president of corporate finance and risk management at Dell and,
prior to that, director of corporate finance. Earlier, he held various
positions over a 12-year period at Citicorp, ranging from general
management to vice president of the High Technology Group. He earned a
bachelor's degree in political economics and a master's degree in finance
from the University of California at Berkeley.
- - GREGORY K. JONES OF UBID, INC. resigned in June. There remains a total of
11 members serving on divine's Board of Directors.
SECOND QUARTER INVESTOR CONFERENCE CALL:
divine's second quarter conference call with the investment community is
scheduled for 5:00 p.m. ET / 4:00 p.m. CT / 3:00 p.m. MT / 2:00 p.m. PT on
Thursday, August 9, 2001. To listen to the call live or for a replay of the
call,
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please visit the Investor Relations page at WWW.DIVINE.COM. A live audio
broadcast of the call will be available at 952-556-2833 and a replay will be
available by calling 703-326-3020, code 5388554.
ABOUT DIVINE, INC.
divine, inc., (Nasdaq: DVIN) delivers a unique combination of services,
Web-based technology, and managed applications capability that enables
businesses to rapidly deploy advanced enterprise edge solutions that are fully
integrated with every aspect of their business strategy and existing technical
systems. Founded in 1999, Chicago-based divine is a leader in promoting the
development of new technologies, products, and services that dramatically change
how businesses manage information, engage and interact with their constituents,
and develop new market opportunities. For more information, visit the company's
web site at www.divine.com.
divine is a component of the Russell 3000(R) and Russell 2000(R) indexes of U.S.
common stocks and one of 14 companies in Russell's Web-based software/services
industry classification to be added to the Russell indexes for 2001, as well as
one of 21 newly-added firms headquartered in Illinois.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The matters discussed in this news release contain forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, that reflect
divine's current expectations about its future results, performance, prospects
and opportunities. All statements other than statements of historical
information provided herein may be deemed to be forward-looking statements.
Without limiting the foregoing, divine has attempted to use the words "may",
"will", "believes", "anticipates", "estimates", "plans", "intends ", "expects"
and similar expressions to identify forward-looking statements. These
forward-looking statements are based on information currently available to
divine and are subject to numerous risks, uncertainties and contingencies that
may cause divine's actual results, performance, prospects or opportunities to
differ materially from those expressed in, or implied by, the forward-looking
statements. These factors include, without limitation: divine's ability to
consummate the eshare and RoweCom mergers; divine's ability to successfully
implement its acquisition strategy, including its ability to integrate the
operations, personnel, products and technologies of, and address the risks
associated with, acquired companies; the overall performance and operating
results of acquired companies; divine's limited operating history and new and
evolving business strategy; divine's ability to expand its customer base and
achieve and maintain profitability; divine's ability to retain key personnel;
divine's ability to predict revenues from project-based engagements; divine's
ability to keep pace with technological developments and industry requirements;
divine's ability to efficiently manage its growing operations; changes in the
market for Internet services and the economy in general; increased competition
from other providers of software solutions and professional services; customers'
purchase of software applications under hosted subscription based models;
divine's ability to address the risks associated with international operations;
and divine's ability to maintain its Nasdaq listing. For further information
about these and other risks, uncertainties and contingencies, please review the
disclosure under the captions "Risk Factors" and "Cautionary Statement Regarding
Forward-Looking Statements" in divine's Registration Statement on Form S-4 filed
with the SEC on August 1, 2001 and as amended from time to time. You should not
place undue reliance on these forward-looking statements, which reflect
management's analysis, judgment, belief or expectation only as of the date
hereof. Except as required by federal securities laws, divine undertakes
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no obligation to publicly revise these forward-looking statements or risks,
uncertainties or contingencies to reflect events or circumstances that arise
after the date hereof.
CAUTIONARY STATEMENT
A PROXY STATEMENT/PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT ON FORM S-4
RELATING TO THE ESHARE MERGER HAS BEEN FILED BY DIVINE AND ESHARE WITH THE SEC
AND A PROXY STATEMENT/PROSPECTUS RELATING TO THE ROWECOM MERGER WILL BE FILED BY
DIVINE AND ROWECOM WITH THE SEC AS SOON AS PRACTICABLE. WHEN FILED, COPIES OF
THESE DOCUMENTS AND OTHER RELATED DOCUMENTS MAY BE OBTAINED FREE OF CHARGE ON
THE SEC'S WEB SITE (WWW.SEC.GOV), FROM DIVINE AND, AS APPLICABLE, FROM ESHARE OR
ROWECOM. ESHARE AND ROWECOM INVESTORS SHOULD READ THE APPLICABLE DOCUMENTS
CAREFULLY BEFORE MAKING A DECISION ABOUT THE APPLICABLE MERGER BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SUCH MERGER, DIVINE AND, AS APPLICABLE,
ESHARE OR ROWECOM.
Divine and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from its stockholders in favor of approval of the
issuance of divine Class A Common Stock in the eshare merger. Information
regarding these persons is set forth in divine's proxy statement for its 2001
Annual Meeting, which was filed with the SEC on Schedule 14A, and additional
information is set forth in the proxy statement/prospectus for the eshare merger
referred to above.
FINANCIAL TABLES FOLLOW
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DIVINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share and per share amounts)
(unaudited)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2001 JUNE 30, 2000 JUNE 30, 2001 JUNE 30, 2000
Revenues:
Products $ 3,381 $ 1,236 $ 4,916 $ 2,330
Services 57,900 10,856 66,122 14,977
------------- ------------- ------------- -------------
61,281 12,092 71,038 17,307
------------- ------------- ------------- -------------
Operating expenses:
Cost of revenues:
Products 431 934 1,282 1,462
Services 45,524 9,793 52,293 13,672
Selling, general and administrative 55,419 50,343 92,673 81,794
Research and development 2,857 3,048 5,990 4,644
Amortization of stock-based compensation 2,234 8,199 5,553 16,864
------------- ------------- ------------- -------------
Total operating expenses 106,465 72,317 157,791 118,436
Operating loss (45,184) (60,225) (86,753) (101,129)
Other income (expense):
Interest income 2,405 2,512 5,912 6,226
Interest expense (1,060) (1,020) (1,336) (1,322)
Other income, net 13,477 18 13,427 15
------------- ------------- ------------- -------------
Total other income (expense) 14,822 1,510 18,003 4,919
Loss before minority interest, gain on
issuance of stock by associated companies,
equity in losses of associated companies
and impairment of investment in equity
and cost method companies (30,362) (58,715) (68,750) (96,210)
Minority interest 1,055 4,353 3,875 8,540
Gain on issuance of stock by associated companies 110 2,915 805 2,915
Equity in losses of associated companies (5,192) (23,936) (12,443) (34,813)
Impairment of investment in equity and cost method companies (4,156) -- (27,619) --
------------- ------------- ------------- -------------
Net loss (38,545) (75,383) (104,132) (119,568)
Accretion of redeemable preferred stock dividends -- (4,294) -- (7,518)
Accretion of preferred stock dividends -- (4,351) -- (8,544)
Deemed dividends -- -- -- (25,814)
------------- ------------- ------------- -------------
Net loss applicable to common stockholders $ (38,545) $ (84,028) $ (104,132) $ (161,444)
============= ============= ============= =============
Basic and diluted loss per share applicable
to common stockholders $ (0.27) $ (0.91) $ (.75) $ (1.86)
Shares used in computing basic and diluted
net loss per share (1) 144,569,725 92,800,311 139,597,070 86,814,615
</Table>
(1) 2000 share counts assume conversion of all preferred shares into common
shares
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DIVINE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $202,177 $252,533
Accounts receivable, net 43,232 7,678
Other current assets 21,730 21,588
-------- --------
Total current assets 267,139 281,799
Goodwill and other intangible assets 44,402 8,621
Ownership interests in associated companies 23,790 65,939
Other assets 77,044 63,822
-------- --------
Total assets $412,375 $420,181
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 44,596 $ 27,571
Other liabilities 65,463 7,777
Minority interest 12,133 16,950
Stockholders' equity 290,183 367,883
-------- --------
Total liabilities and stockholders' equity $412,375 $420,181
======== ========
</Table>
# # #
(C)2001 divine, inc. divine and divine interVentures are trademarks of divine,
inc. All other trademarks, trade names and service marks referenced herein are
the properties of their respective companies.
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