August 18, 2000
BY JESSICA MADORE FITCH BUSINESS REPORTER
Chicago Sun Times
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 less sunny.
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 first quarter.
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 first birthday.
"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 $12.43 3/4.