Net income for the second quarter of 2001 was $4.3 million, which brings the company’s net income for the first half of 2001 to $101.3 million. Ventro’s second quarter results included losses from continuing operations of $29.1 million, $14.7 million of which were charges for restructuring and settlements. These restructuring and settlement charges were related to workforce reductions, write-downs and reserves for certain assets and commitments, and gains and estimated losses for settlements. Ventro improved on its performance from a year ago, when it sustained a net loss from continuing operations of $63.3 million and a loss from discontinued operations of $56.3 million.
Ventro recognized an extraordinary gain of $33.3 million, or approximately $0.72 per share, in the second quarter of 2001 as a result of repurchasing $56.5 million in principal of its 6% Convertible Subordinated Notes. The repurchase of the Notes, which were due in 2007, follows a repurchase of $184.7 million in principal of the Notes in the first quarter. Ventro’s bond repurchases reduced its Notes outstanding from $250 million on December 31, 2000 to approximately $9 million on June 30, 2001. Consequently, annual interest expense for the Notes was reduced from $15 million to approximately $500,000. As a result of the bond repurchases, the Company increased its net assets in the first half of 2001 by $102 million. At June 30, 2001, Ventro’s net assets were $55 million, or $1.19 per outstanding share.
I am pleased with the financial progress we have made this year, said David Zechnich, Ventro’s Chief Financial Officer. We improved our financial position by substantially reducing our debt, which increased shareholders’ equity by over $100 million. Additionally, we reduced cash needs for interest and ongoing operating expenses. Our improved financial position provides a great platform for future growth.
On July 16, 2001 Ventro announced the signing of a definitive agreement to acquire NexPrise, a privately held software company that has developed robust solutions for collaborative product design, complex procurement, and program management. Ventro expects the acquisition to be completed before the end of the third quarter.
Our progress over the last year has been significant, commented David Perry, Ventro’s Chief Executive Officer. With our financial moves and the acquisition of NexPrise, we will have a strong balance sheet, a mature product, a blue-chip customer base, and a seasoned team. We are focused on one of the most exciting areas of business-to-business e-commerce and are positioned well for success.
