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ICG Announces Fourth Quarter and Annual Financial Results



ICG Announces Fourth Quarter and Annual Financial Results

          Company reports record annual revenue, exceeding guidance

     Expects to be non-GAAP net income (loss) per share positive in 2013

RADNOR, Pa., Feb. 21, 2013 (GLOBE NEWSWIRE) -- ICG Group, Inc. (Nasdaq:ICGE)
("ICG") today reported its results for the quarter and year ended December 31,
2012.

"2012 was a year of remarkable accomplishments at ICG from both an operational
and strategic perspective," said Walter Buckley, ICG's Chief Executive
Officer. "We exceeded our revenue guidance and entered 2013 with a strong
recurring revenue base that provides the foundation for continued growth and
profitability."

Highlights

Financial Achievements:

  * Exceeded revenue guidance and achieved the high end of EBITDA guidance
    range
  * Repurchased 930,225 shares of ICG common stock at a weighted average price
    of $8.94 per share for $8.3 million
  * Sold Investor Force to MSCI in early 2013 for $23.5 million, with ICG cash
    proceeds of $20.7 million
  * Sold Channel Intelligence to Google in early 2013 for $125 million, with
    ICG realizing $60.5 million of cash

Operational Initiatives:

  * Acquired 96% ownership in MSDSonline, ICG's recurring revenue compliance
    platform
  * Increased ownership in SeaPass to 53%, bringing SeaPass into ICG's group
    of consolidated companies as ICG's recurring revenue insurance platform
  * Invested substantially in sales and marketing, driving record bookings at
    Procurian, GovDelivery and MSDSonline and resulting in a strong recurring
    revenue base going into 2013
  * Re-branded Procurian to capitalize on its unique, industry-leading value
    proposition
  * Acquired Media IQ and UAI, accretive tuck-in acquisitions, strengthening
    Procurian's industry-leading marketing and energy practices
  * Completed tender offer for Procurian shares, which increased ICG's
    ownership in Procurian to 85%
  * Expanded globally, winning an entry global account at Procurian,
    establishing European sales team in the UK and opening Procurian delivery
    centers in Buenos Aires and Shanghai

Financial Information

Net income for the fourth quarter of 2012 was $14.7 million, or $0.40 per
diluted share, compared to $17.9 million, or $0.49 per diluted share, in the
corresponding 2011 period. Net income for the fourth quarter of 2012 included
gains primarily related to a gain on previous equity interest recorded upon
the consolidation of SeaPass. Net income for 2012 was $23.0 million, or $0.63
per diluted share, as compared to $27.6 million, or $0.74 per diluted share,
for 2011.

Investor Force and Channel Intelligence are both presented within discontinued
operations for all periods presented. To aid the guidance comparisons, we
provide the following reconciliation ($s in millions):

                                                     Q4          Year Ended
                                                     2012  2011  2012   2011
                                                                         
Core consolidated revenue                            $53.6 $36.1 $191.5 $140.5
Impact of Investor Force and Channel Intelligence    (8.9) (1.7) (19.7) (7.1)
dispositions
Impact of acquired business' deferred revenue        (1.1) —     (5.2)  —
                                                                         
GAAP revenue                                         $43.6 $34.4 $166.6 $133.4
                                                                         
                                                                         
Core consolidated EBITDA                              $4.7  $5.6  $19.7  $17.7
                                                                         

2013 Guidance

In 2013, ICG expects core consolidated revenue in the range of between $210
and $220 million, an increase of between 26% and 32% over 2012, and we expect
to generate $0.01 to $0.05 of non-GAAP net income per share.

"We enter 2013 with a base of annual recurring revenue and a strong pipeline
that provides a solid foundation for our performance in 2013 and beyond," said
Kirk Morgan, Chief Financial Officer. "Importantly, we expect to achieve this
growth and profitability while making continued investments in key areas,
including over $35 million into sales and marketing, an increase of
approximately 60% compared to 2012."

A reconciliation of the most comparable GAAP financial measures to the
non-GAAP measures used above is included with the financial tables at the end
of this release.

Please see ICG's website at www.icg.com for more information on ICG, its
companies and its fourth quarter and annual 2012 results.

ICG will host a webcast at 10:00 a.m. ET today to discuss its financial
results. As part of the live webcast for this call, ICG will post a slide
presentation to accompany the prepared remarks. The webcast can be accessed at
www.icg.com/investors/events-and-presentations/. 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 by dialing 866-730-5762 or 857-350-1586. The passcode
is 64646806.

For those unable to participate in the conference call, a replay will be
available from February 21, 2013 at 12:00 p.m. ET until February 28, 2013 at
11:59 p.m. ET. To access the replay, dial888-286-8010 or 617-801-6888. The
pass code is 92126304. The replay and slide presentation also can be accessed
in the investor relations section of the ICG website at
www.icg.com/investors/events-and-presentations/.

About ICG

ICG provides leading cloud-based software and solutions in procurement,
government, compliance and insurance.  ICG's software platforms automate
industry-specific processes that drive growth, cost savings and compliance for
its customers globally.  Headquartered in Radnor, Pennsylvania, ICG has more
than 1,000 employees worldwide.  For more information, please go to
www.icg.com.

The ICG logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7794

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 effect of economic
conditions generally, capital spending by our companies' customers, our
companies' collective ability to retain existing customer relationships and
secure new ones, our companies' ability to compete successfully against their
respective competitors, our companies' ability to timely and effectively
respond to technological developments, our and our companies' collective
ability to retain key personnel, our ability to have continued access to
capital and to deploy capital effectively and on acceptable terms, our ability
to maximize value in connection with divestitures, and other risks and
uncertainties detailed in ICG's filings with the Securities and Exchange
Commission. These and other factors may cause actual results to differ
materially from those projected. 

 ICG Group, Inc. 
 Consolidated Statements of Operations 
(In thousands, except per share data)
(Unaudited)
                                                                     
                                     Three Months Ended   12 Months Ended 
                                     December 31,         December 31, 
                                    2012       2011      2012       2011
                                                                     
                                                                     
 Revenue                             $ 43,584   $ 34,435  $ 166,593  $ 133,437
                                                                     
 Operating Expenses                                                  
 Cost of revenue                     28,403     20,589    105,762    81,281
 Sales and marketing                 6,078      3,665     21,920     13,466
 General and administrative          10,642     6,945     38,805     29,228
 Research and development            4,106      2,174     14,175     9,157
 Amortization of intangibles         1,901      399       5,590      1,412
 Impairment related and other        521        367       1,548      753
 Total operating expenses            51,651     34,139    187,800    135,297
                                                                     
 Operating income (loss)             (8,067)    296       (21,207)   (1,860)
                                                                     
 Other income (expense):                                             
 Other income (loss), net            23,899     16,440    56,919     42,624
 Interest income                     108        95        442        393
 Interest expense                    (171)      (100)     (526)      (577)
                                                                     
 Income (loss) before income taxes,
equity loss and discontinued         15,769     16,731    35,628     40,580
operations 
                                                                     
 Income tax benefit (expense)        (334)      4,926     (1,336)    4,287
 Equity loss                         (961)      (1,958)   (8,107)    (11,964)
                                                                     
 Income (loss) from continuing       14,474     19,699    26,185     32,903
operations 
 Income (loss) from discontinued     (33)       (539)     (2,999)    (3,102)
operations 
 Net income (loss)                   14,441     19,160    23,186     29,801
 Less: Net income (loss)
attributable to the noncontrolling   (221)      1,294     197        2,235
interest 
 Net income (loss) attributable to   $ 14,662   $ 17,866  $ 22,989   $ 27,566
ICG 
                                                                     
 Amounts attributable to ICG common                                  
shareholders: 
 Net income (loss) from continuing   $ 15,272   $ 18,291  $ 26,212   $ 30,013
operations 
 Net income (loss) from              (610)      (425)     (3,223)    (2,447)
discontinued operations 
 Net income (loss) attributable to   $ 14,662   $ 17,866  $ 22,989   $ 27,566
ICG common shareholders 
                                                                     
 Basic net income (loss) per                                         
share: 
 Income (loss) from continuing
operations attributable to ICG       $ 0.43     $ 0.50    $ 0.73     $ 0.82
common shareholders 
 Income (loss) from discontinued
operations attributable to ICG       (0.02)     (0.01)    (0.09)     (0.07)
common shareholders 
 Income (loss) attributable to ICG   $ 0.41     $ 0.49    $ 0.64     $ 0.75
common shareholders 
                                                                     
 Diluted net income (loss) per                                       
share: 
 Income (loss) from continuing
operations attributable to ICG       $ 0.42     $ 0.50    $ 0.72     $ 0.80
common shareholders 
 Income (loss) from discontinued
operations attributable to ICG       (0.02)     (0.01)    (0.09)     (0.06)
common shareholders 
 Income (loss) attributable to ICG   $ 0.40     $ 0.49    $ 0.63     $ 0.74
common shareholders 
                                                                     
 Shares used in computation of
basic net income (loss) per common   35,840     36,170    35,890     36,656
share attributable to ICG common
shareholders 
 Shares used in computation of
diluted net income (loss) per        36,912     36,633    36,554     37,460
common share attributable to ICG
common shareholders 

 
 ICG Group, Inc. 
 Condensed Consolidated Balance Sheets 
(In thousands)
(Unaudited)
                                                                 
                                                                 
                                                  December 31,   December 31, 
                                                  2012           2011 
                                                                 
 ASSETS                                                          
 Cash and cash equivalents                        $ 45,526       $ 121,871
 Restricted cash                                  827            133
 Accounts receivable, net                         47,315         30,384
 Other receivables                                405            22,679
 Deferred tax asset                               348            613
 Prepaid expenses and other current assets        6,132          2,509
 Assets of discontinued operations                83,552         3,866
 Total current assets                             184,105        182,055
 Marketable securities                            327            -- 
 Fixed assets, net                                13,781         5,682
 Ownership interests                              12,913         39,052
 Goodwill and Intangibles, net                    187,715        36,274
 Deferred tax asset                               30,332         31,940
 Cost method investments                          13,007         10,820
 Other assets, net                                3,338          997
 Total Assets                                     $ 445,518      $ 306,820
                                                                 
                                                                 
                                                                 
 LIABILITIES AND EQUITY                                          
 Current maturities of other long-term debt       $ 5,336        $ 4,616
 Accounts payable                                 7,016          2,116
 Accrued expenses                                 9,048          5,786
 Accrued compensation and benefits                19,658         11,737
 Deferred revenue                                 18,324         11,425
 Liabilities of discontinued operations           10,894         3,329
 Total current liabilities                        70,276         39,009
 Long-term debt                                   27,983         10,681
 Other non-current liabilities                    5,853          2,255
 Total Liabilities                                104,112        51,945
 Redeemable noncontrolling interest               3,505          1,378
 Equity:                                                         
 Controlling (ICG) equity                         265,668        245,884
 Noncontrolling interest                          72,233         7,613
 Total Equity                                     337,901        253,497
 Total Liabilities, Redeemable noncontrolling     $ 445,518      $ 306,820
interest and Equity 

 
ICG Group, Inc.
Reconciliation of GAAP Financial Measure to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
                                                                                                       
                2011                                  2012                                  Full Year
                Q1        Q2       Q3       Q4        Q1       Q2       Q3        Q4        2011      2012
GAAP Revenue:   $32,044   $33,531  $33,427  $34,435   $34,698  $42,822  $45,489   $43,584   $133,437  $166,593
 Add back:
Acquired
businesses'      --        --       --       --        --       2,537    1,593     1,062     --        5,192
deferred
revenue
 Add back:
Impact of        1,910     1,797    1,715    1,668     1,932    2,256    6,545     8,944     7,090     19,677
discontinued
operations
 Non-GAAP       $33,954   $35,328  $35,142  $36,103   $36,630  $47,615  $53,627   $53,590   $140,527  $191,462
revenue 
                                                                                                       
                                                                                                       
GAAP Net income
(loss)          $15,890   ($3,233) ($2,957) $17,866   ($7,020) ($5,994) $21,341   $14,662   $27,566   $22,989
attributable to
ICG:
 Add back:                                                                                             
 Share-based     733       925      1,012    1,590     1,638    1,739    1,811     1,738     4,260     6,926
compensation
 Amortization    337       338      338      338       424      1,436    1,829     1,901     1,351     5,590
of intangibles
 Impairment
related and      37        82       267      367       127      160      739       521       753       1,547
other
 Other (income)  (24,946)  (1,612)  374      (16,440)  (397)    (1,054)  (31,570)  (23,899)  (42,624)  (56,920)
loss, net
 Acquired
businesses'      --        --       --       --        --       2,537    1,593     1,062     --        5,192
deferred
revenue
 Equity loss    3,576     3,185    3,245    1,958     2,303    3,236    1,608     961        11,964    8,108
 Income tax
expense          2,620     (1,124)  (1,598)  (4,214)   279      71       5         (222)     (4,316)   133
(benefit) -
deferred
 Impact of
discontinued     1         101      130      7         1        204      1,854     423       239       2,482
operations
 Non-GAAP net   ($1,752)  ($1,338) $811     $1,472    ($2,645) $2,335   ($790)    ($2,853)  ($807)    ($3,953)
income (loss)
Net income
(loss)
attributable to  352       254      335      1,294     152      652      (387)     (222)     2,235     195
non-controlling
interests
Interest
(income)         62        62       55       5         (29)     (5)      55        89        184       110
expense, net
Depreciation     717       730      762      852       770      832      1,133     1,804     3,061     4,539
Corporate/other $4,114    $3,882   $2,089   $2,581    $4,442    3,403   $4,096    $5,401    $12,666   $17,342
Income tax
expense         $320      $161     $260     ($712)    $261     $321     $66       $555      $29       $1,203
(benefit) -
current
Impact of
discontinued    $72       $77      $80      $83       $81      $61      $132      ($37)     $312      $237
operations
Core
Consolidated
EBITDA
(excluding      $3,885    $3,828   $4,392   $5,575    $3,032   $7,599   $4,305    $4,737    $17,680   $19,673
share-based
compensation
and unusual
items)
                                                                                                       
                                                                                                       
GAAP Net income
(loss) per      $0.42     ($0.09)  ($0.08)  $0.49     ($0.19)  ($0.17)  $0.59     $0.40     $0.74     $0.63
diluted share:
 Add back:                                                                                             
 Share-based    $0.02     $0.03    $0.03    $0.04     $0.05    $0.05    $0.05     $0.05     $0.12     $0.19
compensation
 Amortization   $0.01     $0.01    $0.01    $0.01     $0.01    $0.04    $0.05     $0.05     $0.04     $0.16
of intangibles
 Impairment
related and     $0.00     $0.00    $0.01    $0.01     $0.00    $0.00    $0.02     $0.01     $0.02     $0.04
other
 Other (income) ($0.68)   ($0.04)  $0.01    ($0.45)   ($0.01)  ($0.03)  ($0.89)   ($0.67)   ($1.16)   ($1.57)
loss, net
 Acquired
businesses'     $0.00     $0.00    $0.00    $0.00     $0.00    $0.07    $0.04     $0.03     $0.00     $0.14
deferred
revenue
 Equity loss    $0.10     $0.09    $0.09    $0.05     $0.06    $0.09    $0.05     $0.03     $0.32     $0.22
 Income tax
expense         $0.07     ($0.03)  ($0.04)  ($0.12)   $0.01    $0.00    $0.00     ($0.01)   ($0.12)   $0.00
(benefit) -
deferred
 Discontinued   $0.00     $0.00    $0.00    $0.00     $0.00    $0.01    $0.05     $0.01     $0.01     $0.07
Operations
 Non-GAAP net
income (loss)   ($0.06)   ($0.04)  $0.02    $0.04     ($0.07)  $0.06    ($0.03)   ($0.09)   ($0.03)   ($0.11)
per diluted
share
                                                                                                       
Shares used in
calcuation of
GAAP net income
(loss) per                                                                                             
share
attributable to
ICG:
Basic            36,944    36,961   36,556   36,170    36,156   35,917   35,650    35,840    36,656    35,890
Diluted          37,991    36,961   36,556   36,633    36,156   35,917   36,273    36,912    37,460    36,554
                                                                                                       
Shares used in
calcuation of
non-GAAP net
income (loss)                                                                                          
per share
attributable to
ICG:
Basic            36,944    36,961   36,556   36,170    36,156   35,917   35,650    35,840    36,656    35,890
Diluted          36,944    36,961   37,265   36,633    36,156   36,422   35,650    35,840    36,656    35,890

About ICG's Non-GAAP Financial Measures

This release contains non-GAAP financial measures. The tables above reconcile
these non-GAAP financial measures to the most directly comparable GAAP
financial measures.

Non-GAAP financial measures should not be considered as a substitute for, or
as superior to, measures of financial performance prepared in accordance with
GAAP.  ICG strongly urges investors and potential investors in our securities
to review the reconciliation of our non-GAAP financial measures to the
comparable GAAP financial measures that are included in this release.

ICG's management believes that its non-GAAP financial measures provide useful
information to investors because they allow investors to view the business
through the eyes of management and provide meaningful supplemental information
regarding ICG's operating results, as they exclude amounts that ICG excludes
as part of its monitoring of operating results and assessment of the
performance of the business.  

ICG presents the following non-GAAP financial measures in this release:  (1)
non-GAAP revenue, (2) non-GAAP net income (loss), (3) non-GAAP net income
(loss) per share and (4) core consolidated EBITDA (excluding stock based
compensation and unusual items).  ICG includes or excludes items from these
non-GAAP financial measures as described below.

Non-GAAP revenue includes the following item:

  * Acquired businesses' deferred revenue.  ICG includes acquired businesses'
    previously deferred revenues that are not recognized under GAAP because
    ICG considers them a part of ongoing operating results when assessing the
    performance of its business and believes it is useful for investors to
    understand the effects of these items on its operations.
     
  * Impact of discontinued operations. ICG includes revenues associated with
    discontinued operations given direct correlation with respect to existing
    core consolidated revenue guidance range. ICG does not consider them a
    part of ongoing operating results but believes it is useful for investors
    to understand the effect of this item for all periods presented as
    compared to what has historically been provided.  

Non-GAAP net income (loss), in addition to deferred revenue adjustments
inclusion above, excludes the additional following items:

  * Share-based compensation. ICG excludes share-based compensation expenses
    associated with equity granted to employees and non-employee directors
    primarily because they are non-cash expenses that ICG does not consider
    part of ongoing operating results when assessing the performance of its
    business, and the exclusion of these expenses facilitates the comparison
    of results over different time periods and the comparison of ICG's results
    with results of other companies.
     
  * Amortization of intangibles. ICG excludes amortization of acquired
    intangibles, primarily customer relationships and technology, because they
    are expenses that ICG does not consider part of ongoing operating results
    when assessing the performance of its business, and ICG believes that
    doing so facilitates comparisons to its historical operating results and
    to the results of other companies.
     
  * Impairment-related and other costs. ICG excludes the effect of
    impairment-related and other costs, which primarily include impairment
    charges, revaluation of contingent consideration, restructuring and
    severance fees, acquisition related costs, legal and settlement costs and
    other one-time costs, because ICG does not consider them part of ongoing
    operating results when assessing the performance of its business and
    believes it is useful for investors to understand the effects of these
    items on ICG's operations. 
     
  * Other income (loss), net. ICG excludes the effect of other income (loss),
    net, which primarily includes transaction-driven gains and losses, as well
    as certain foreign currency impacts, because ICG does not consider them
    part of ongoing operating results when assessing the performance of its
    business and believes it is useful for investors to understand the effects
    of these items on ICG's operations.
     
  * Equity loss.  In accordance with GAAP, ICG recognizes its share of the
    earnings or losses of each company accounted for under the equity method
    and adjusts the carrying amount for each such company for its share of the
    earnings or losses of the company.  ICG excludes GAAP equity income (loss)
    because it is significantly impacted by factors outside its direct
    control.
     
  * Income tax expense (benefit) - deferred.  ICG excludes the effect of
    deferred income tax expense (benefit) primarily because it is a non-cash
    expense that ICG does not consider a meaningful component of its operating
    results when assessing the performance of its business, and the exclusion
    of this item facilitates the comparison of results over different time
    periods.
     
  * Impact of discontinued operations. ICG includes the impact of discontinued
    operations as ICG believes it is useful for investors to understand the
    effect of this item for all periods presented as compared to what has
    historically been provided.  

Non-GAAP net income (loss) per share is calculated as follows:

  * Non-GAAP net income (loss) (as defined above) is the numerator.
     
  * Shares used in calculation of non-GAAP net income (loss) per share. For
    periods where GAAP and non-GAAP net income (loss) are both losses, ICG
    uses the same number of shares used to calculate GAAP and non-GAAP net
    loss per share. For periods where GAAP and non-GAAP net income (loss) are
    both income, ICG uses the same number of shares used to calculate GAAP and
    non-GAAP net income per share. For periods where GAAP net income (loss) is
    a loss but non-GAAP net income (loss) is income, ICG includes the impact
    of incremental dilutive securities for the period to determine non-GAAP
    net income per share. For periods where GAAP net income (loss) is income
    but non-GAAP net income (loss) is a loss, ICG excludes the impact of
    incremental dilutive securities for the period to determine non-GAAP net
    loss per share.  

Core consolidated EBITDA, excluding share-based compensation and unusual
items, is the sum of the earnings (losses) before interest, taxes,
depreciation and amortization, share-based compensation and unusual items of
ICG's core consolidated companies. ICG considers charges unusual when they are
transactional-driven or non-recurring. Core consolidated EBITDA excludes the
items described above, as well as the following:

  * Net income (loss) attributable to non-controlling interests. ICG excludes
    net income (loss) attributable to non-controlling interests primarily
    because non-controlling interest includes income or loss from operations
    due to non-controlling interests that are unrelated to ICG's ownership.
     
  * Corporate/other. ICG excludes corporate operating expenses and adjusts for
    other core consolidated non-operational items primarily because ICG
    considers this in assessing the performance of its core consolidated
    businesses. 

ICG believes that the following considerations apply to the non-GAAP financial
measures that it presents:

  * ICG's management uses non-GAAP revenue, non-GAAP net income (loss),
    non-GAAP net income (loss) per share and core consolidated EBITDA,
    excluding share-based compensation and unusual items, in internal reports
    used by management in monitoring and making decisions regarding ICG's
    business, including in monthly financial reports prepared for management
    and in periodic reports to ICG's Board of Directors. 
  * An important limitation of ICG's non-GAAP financial measures is that they
    exclude expenses, some of which may be significant, that are required by
    GAAP to be recorded.  In addition, non-GAAP financial measures are subject
    to inherent limitations because they reflect the exercise of judgments by
    management about which charges to exclude from the non-GAAP financial
    measures.
     
  * To mitigate the limitations associated with non-GAAP financial measures,
    ICG reconciles its non-GAAP financial measures to the nearest comparable
    GAAP financial measures and recommends that investors and potential
    investors do not give undue weight to its non-GAAP financial measures.

CONTACT: Investor inquiries:
         Karen Greene
         ICG
         Investor Relations
         610-727-6900
         IR@icg.com

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