|From today's Chicago Sun Times:|
Despite loss, divine says future
August 18, 2000
BY JESSICA MADORE FITCH BUSINESS REPORTER
In its first public statement since going public in July, divine interVentures inc. was
predictably upbeat about the future, although the company's financial results were far
Revenue more than doubled last quarter, but divine's net loss nearly doubled as well.
The Lisle-based Internet incubator reported a loss of $75.4 million in the second
quarter, compared with a $44.2 million loss in the first quarter. Revenue rose to
$12.1 million, up from $5.2 million.
Divine's consolidated financial results, however, only include 26 of its 52 associated
companies, and therefore don't reflect the breadth of its financial position. In lieu of
this, divine offered unaudited aggregate revenue for its 52 associated companies:
$60.7 million in the second quarter, a 54 percent increase over $39.3 million in the
During a conference call Thursday, founder Andrew J. "Flip" Filipowski reminded
the audience that divine is still a very young company, having recently celebrated its
"We're pleased with the progress of the companies in our portfolio and proud of our
people's efforts to create value by working in concert," Filipowski said.
Mike Cullinane, divine's chief financial officer, said divine is burning through $3
million each month and has about $327 million in cash and securities on hand.
"Things look better than I expected," said George Nichols, an analyst at
Morningstar, the Chicago-based financial information company.
But in light of the finicky public market, Filipowski has become more conservative
about divine's investments.
In the first quarter of the year, divine spent $200.6 million of $247.3 million of
deployed capital on new investments. But in the past three months, divine spent just
$76.7 million of $324 million in deployed capital on new investments.
"They are investing more of their money in their current portfolio companies, rather
than bringing new companies into the fold," Nichols said. "They need to nurture their
own companies, rather than stretch themselves even thinner."
Shareholders boosted shares of divine before the earnings announcement. The stock
finished Thursday up 53 cents at $7.50, still below the $9 IPO price and its high of