The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from GlobeNewswire (a Nasdaq OMX company)

ICG Announces Second Quarter Financial Results

Thursday, July 26, 2012

ICG Announces Second Quarter Financial Results05:30 EDT Thursday, July 26, 2012WAYNE, Pa., July 26, 2012 (GLOBE NEWSWIRE) -- ICG Group, Inc. (Nasdaq:ICGE) ("ICG") today reported its results for the quarter ended June 30, 2012. "Our results were exceptionally strong during the quarter as our companies continue to exceed expectations," said Walter Buckley, ICG's Chief Executive Officer. "Additionally, in July, we increased our stake in Channel Intelligence, giving us our fourth consolidated platform. This is consistent with our strategic goal of aggressively driving growth at our consolidated companies while consolidating or monetizing our minority holdings. We look forward to building on the positive momentum reflected in the upward revisions to our 2012 guidance."Financial Information Revenue increased to $45.1 million for the second quarter of 2012, up from $35.3 million in the corresponding 2011 period. Second quarter 2012 revenue would have been $2.5 million higher had revenues previously deferred by MSDSonline prior to ICG's acquisition of MSDSonline been recognized in the period. Excluding this $2.5 million, ICG core consolidated revenue, a non-GAAP revenue measure, grew 35% from the second quarter of 2011.  Core consolidated EBITDA for the second quarter of 2012 was $7.6 million, compared to $3.8 million in the corresponding 2011 period.  Reflecting the recent acquisitions and improved company performance, ICG is increasing its 2012 guidance, expecting to achieve 2012 core consolidated revenue in the range of $180 million to $190 million and core consolidated EBITDA in the range of $18 million to $20 million.  Adjusted operating income (loss) for the second quarter of 2012 was income of $4.2 million, compared to a loss of $(0.1) million in the corresponding 2011 period.  Procurian reported $37.4 million of revenue for the second quarter of 2012, representing a 23% increase from the corresponding 2011 period. Procurian's EBITDA, excluding stock-based compensation and unusual items, for the quarter was $7.8 million, as compared to $5.0 million in the comparable 2011 period.  GovDelivery and MSDSonline, which comprise ICG's Government and Compliance sector, achieved $7.9 million of core revenue (without reduction for the aforementioned $2.5 million adjustment) for the second quarter of 2012, equating to 30% organic growth from the corresponding 2011 period.   Net loss for the second quarter of 2012 was $(6.0) million, or $(0.17) per diluted share, compared to net loss of $(3.2) million, or $(0.09) per diluted share, in the corresponding 2011 period.  Net loss was higher than expected in the second quarter of 2012 due to the impact of acquisition accounting and increased losses at non-core equity companies, primarily as a result of costs associated with the recent sale of GoIndustry-Dovebid.Additional Highlights In July, ICG increased its ownership in Channel Intelligence's parent to 51%, bringing it into ICG's group of consolidated companies.  In tandem with this consolidation, ICG President Doug Alexander has assumed the role of CEO of Channel Intelligence.  Procurian acquired Media IQ, a strategically compelling and accretive addition to Procurian's marketing spend management capabilities. "ICG demonstrated strong performance across the board this quarter, both strategically and operationally," said Kirk Morgan, Chief Financial Officer of ICG. "Our recent acquisitions and improving performance move us further along in the trajectory to reach our long-term targets of $500 million of revenue and $70 million of EBITDA by 2015." Please see ICG's website at www.icg.com for more information on ICG, its companies and its second quarter 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. To access the webcast, go to www.icg.com and click on the investor relations tab. Then click the link for the second quarter conference call webcast. 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 800-706-7748or 617-614-3473. The pass code is54992627. For those unable to participate in the conference call, a replay will be available from July 26, 2012 at 12:00 p.m. ET until August 2, 2012 at 11:59 p.m. ET. To access the replay, dial 888-286-8010 or 617-801-6888. The pass code is 99558986. 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 (Nasdaq:ICGE) identifies, capitalizes and grows companies in the cloud-based software and services sectors.  These companies transform the way business is done by enabling enterprises to increase efficiencies and improve critical processes. ICG leverages its unique expertise to carefully identify companies based on their potential to become market changers and market leaders. ICG focuses on building profitable businesses in these sectors by providing them with access to management expertise and strategic and operational guidance, as well as growth capital. The ICG logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7794Safe 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)              Three Months Ended   Six Months Ended     June 30,   June 30,    2012 2011 2012 2011                      Revenue   $ 45,078  $ 35,328  $ 81,708  $ 69,282            Operating Expenses           Cost of revenue   27,018  21,775  50,643  42,765  Selling, general and administrative   15,199  12,115  28,790  23,702  Research and development   4,038  3,325  7,352  6,454  Amortization of intangibles   1,436  338  1,860  675  Impairment related and other   160  82  287  119  Total operating expenses   47,851  37,635  88,932  73,715            Operating income (loss)   (2,773)  (2,307)  (7,224)  (4,433)            Other income (loss), net   1,054  1,612  1,451  26,558  Interest income   93  124  230  208  Interest expense   (88)  (186)  (196)  (332)  Income (loss) before income taxes and equity loss   (1,714)  (757)  (5,739)  22,001            Income tax benefit (expense)   (392)  963  (932)  (1,977)  Equity loss   (3,236)  (3,185)  (5,539)  (6,761)  Net income (loss)   (5,342)  (2,979)  (12,210)  13,263  Less: Net income (loss) attributable to the noncontrolling interest   652  254  804  606  Net income (loss) attributable to ICG   $ (5,994)  $ (3,233)  $ (13,014)  $ 12,657                     Basic net income (loss) per share:           Income (loss) attributable to ICG common shareholders   $ (0.17)  $ (0.09)  $ (0.36)  $ 0.34            Shares used in computation of basic net income (loss) per common share attributable to ICG common shareholders   35,917  36,961  36,037  36,953           Diluted net income (loss) per share:           Income (loss) attributable to ICG common shareholders   $ (0.17)  $ (0.09)  $ (0.36)  $ 0.33            Shares used in computation of diluted net income (loss) per common share attributable to ICG common shareholders   35,917  36,961  36,037  37,976      ICG Group, Inc.  Condensed Consolidated Balance Sheets (In thousands)                June 30,   December 31,     2012   2011        ASSETS       Cash and cash equivalents   $ 57,145  $ 121,909  Restricted cash   295  133  Accounts receivable, net   41,496  32,762  Other receivables   --   22,679  Deferred tax asset   613  613  Prepaid expenses and other current assets   7,062  2,835  Total current assets   106,611  180,931  Marketable securities   1,025  --   Fixed assets, net   8,060  6,046  Ownership interests   43,125  39,052  Goodwill and Intangibles, net   100,940  36,969  Deferred tax asset   31,906  31,940  Cost method investments   11,345  10,820  Other assets, net   873  1,062  Total Assets   $ 303,885  $ 306,820                   LIABILITIES AND EQUITY       Current maturities of other long-term debt   $ 4,173  $ 4,759  Accounts payable   4,982  2,300  Accrued expenses   7,905  6,179  Accrued compensation and benefits   12,004  12,058  Deferred revenue   16,726  13,491  Total current liabilities   45,790  38,787  Long-term debt   8,666  10,761  Other non-current liabilities   2,929  2,397  Total Liabilities   57,385  51,945  Redeemable noncontrolling interest   2,852  1,378  Equity:       Controlling (ICG) equity   233,233  245,884  Noncontrolling interest   10,415  7,613  Total Equity   243,648  253,497  Total Liabilities, Redeemable noncontrolling interest and Equity   $ 303,885  $ 306,820          ICG Group, Inc.Non-GAAP Reconciliation(In thousands)          The following table is a reconciliation of non-GAAP financial measures to GAAP results.             Quarter Ended June 30,  Six Months Ended June 30,   2012201120122011          Reconciliation of GAAP revenue to core consolidated revenue (A)          GAAP revenue $ 45,078  $ 35,328  $ 81,708  $ 69,282           Previously deferred MSDSonline revenue not recognized under U.S. GAAP  2,537  --   2,537  --           Core consolidated revenue $ 47,615  $ 35,328  $ 84,245  $ 69,282                    Reconciliation of GAAP Net income (loss) attributable to ICG to adjusted operating income (loss) and core consolidated EBITDA (A)          GAAP Net income (loss) attributable to ICG: $ (5,994) $ (3,233) $ (13,014) $ 12,657           Net income attributable to non-controlling interests  652  254  804  606 Equity loss  3,236  3,185  5,539  6,761 Income tax expense (benefit)  392  (963)  932  1,977 Interest (income) expense, net  (5)  62  (34)  124 Other (income) loss, net (B)  (1,054)  (1,612)  (1,451)  (26,558)          Consolidated operating income (loss) (2,773) (2,307) (7,224) (4,433)           Previously deferred MSDSonline revenue not recognized under U.S. GAAP  2,537  --   2,537  --  Amortization of intangibles (resulting from acquisitions) - corporate  1,347  338  1,684  675 Depreciation and amortization - core consolidated  964  796  1,885  1,572 Depreciation - corporate  18  11  34  24 Stock-based compensation - corporate  1,418  836  2,868  1,464 Stock-based compensation - core consolidated  525  190  714  296 Impairment related and other - corporate  135  --   135  --  Impairment related and other - core consolidated  25  82  152  119          Adjusted operating income (loss)  4,196  (54)  2,785  (283)          Corporate:         Operating expenses  3,819  3,870  8,021  7,902          Core Consolidated Companies:         Other income (loss), net  (416)  11  (176)  93          Core consolidated EBITDA $ 7,599  $ 3,827  $ 10,630  $ 7,712           (A) Core consolidated revenue, core consolidated EBITDA and adjusted operating income (loss) are non-GAAP financial measures and have no standardized measurement prescribed by GAAP. The acquisition of MSDSonline occurred on March 30, 2012 and is included in our results starting in the second quarter of 2012. Core consolidated revenue is the sum of the revenue of ICG's core consolidated companies, GovDelivery, InvestorForce, MSDSonline (beginning in the second quarter of 2012) and Procurian. Core consolidated EBITDA is the sum of the earnings (losses) before interest, taxes, depreciation and amortization, stock-based compensation and unusual items of ICG's core consolidated companies, GovDelivery, InvestorForce, MSDSonline (beginning in the second quarter of 2012) and Procurian. ICG's management considers charges unusual when they are transactional-driven or non-recurring. Adjusted operating income (loss) is consolidated operating income (loss), adjusted for depreciation and amortization, stock-based compensation, and impairment related and other amounts of ICG and its core consolidated companies, GovDelivery, InvestorForce, MSDSonline (beginning in the second quarter of 2012) and Procurian. ICG's management believes these non-GAAP financial measures provide useful information to investors, potential investors, securities analysts and others that enables each such group to evaluate core consolidated companies' current and future prospects in a similar manner as ICG's management and to review results on a comparable basis for all periods presented.           (B) Other (income) loss, net, as reflected in reconciliation above, relates to net gains as follows:  Quarter Ended June 30,  Six Months Ended June 30,   2012201120122011  (in millions)           Gain on Metastorm Sale  $ --   $ --   $ 0.2  $ 24.9 Gain on sales of marketable securities  1.4  --   1.4  --  Gain on distribution  --   1.4  --   1.4 Net gains (losses) on sales of companies  --   0.2  --   0.2 Other, net  (0.3)  --   (0.1)  --  Other income (loss), net on Consolidated Statements of Operations  $ 1.1  $ 1.6  $ 1.5  $ 26.5CONTACT: Investor inquiries: Karen Greene ICG Investor Relations 610-727-6900 IR@icg.com