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 Fourth Quarter and Annual Financial Results

Thursday, February 21, 2013

ICG Announces Fourth Quarter and Annual Financial Results05:30 EST Thursday, February 21, 2013 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."HighlightsFinancial 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 cashOperational 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 ShanghaiFinancial 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 dispositions (8.9) (1.7) (19.7) (7.1) 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=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)(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 operations   15,769  16,731  35,628  40,580            Income tax benefit (expense)   (334)  4,926  (1,336)  4,287  Equity loss   (961)  (1,958)  (8,107)  (11,964)            Income (loss) from continuing operations   14,474  19,699  26,185  32,903  Income (loss) from discontinued operations   (33)  (539)  (2,999)  (3,102)  Net income (loss)   14,441  19,160  23,186  29,801  Less: Net income (loss) attributable to the noncontrolling interest   (221)  1,294  197  2,235  Net income (loss) attributable to ICG   $ 14,662  $ 17,866  $ 22,989  $ 27,566           Amounts attributable to ICG common shareholders:           Net income (loss) from continuing operations   $ 15,272  $ 18,291  $ 26,212  $ 30,013  Net income (loss) from discontinued operations   (610)  (425)  (3,223)  (2,447)  Net income (loss) attributable to ICG common shareholders   $ 14,662  $ 17,866  $ 22,989  $ 27,566           Basic net income (loss) per share:           Income (loss) from continuing operations attributable to ICG common shareholders   $ 0.43  $ 0.50  $ 0.73  $ 0.82  Income (loss) from discontinued operations attributable to ICG common shareholders   (0.02)  (0.01)  (0.09)  (0.07)  Income (loss) attributable to ICG common shareholders   $ 0.41  $ 0.49  $ 0.64  $ 0.75           Diluted net income (loss) per share:           Income (loss) from continuing operations attributable to ICG common shareholders   $ 0.42  $ 0.50  $ 0.72  $ 0.80  Income (loss) from discontinued operations attributable to ICG common shareholders   (0.02)  (0.01)  (0.09)  (0.06)  Income (loss) attributable to ICG common shareholders   $ 0.40  $ 0.49  $ 0.63  $ 0.74            Shares used in computation of basic net income (loss) per common share attributable to ICG common shareholders   35,840  36,170  35,890  36,656  Shares used in computation of diluted net income (loss) per common share attributable to ICG common shareholders   36,912  36,633  36,554  37,460   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 interest and Equity   $ 445,518  $ 306,820  ICG Group, Inc.Reconciliation of GAAP Financial Measure to Non-GAAP Financial Measures(In thousands, except per share data)(Unaudited)                        20112012Full Year Q1Q2Q3Q4Q1Q2Q3Q420112012GAAP 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' deferred revenue  --   --   --   --   --   2,537  1,593  1,062  --   5,192  Add back: Impact of discontinued operations  1,910  1,797  1,715  1,668  1,932  2,256  6,545  8,944  7,090  19,677 Non-GAAP revenue $33,954$35,328$35,142$36,103$36,630$47,615$53,627$53,590$140,527$191,462                                            GAAP Net income (loss) attributable to ICG:$15,890 ($3,233)($2,957)$17,866 ($7,020)($5,994)$21,341 $14,662 $27,566 $22,989  Add back:                      Share-based compensation  733  925  1,012  1,590  1,638  1,739  1,811  1,738  4,260  6,926  Amortization of intangibles  337  338  338  338  424  1,436  1,829  1,901  1,351  5,590  Impairment related and other  37  82  267  367  127  160  739  521  753  1,547  Other (income) loss, net  (24,946)  (1,612)  374  (16,440)  (397)  (1,054)  (31,570)  (23,899)  (42,624)  (56,920)  Acquired businesses' deferred revenue  --   --   --   --   --   2,537  1,593  1,062  --   5,192  Equity loss 3,576 3,185 3,245 1,958 2,303 3,236 1,608 961  11,964  8,108  Income tax expense (benefit) - deferred  2,620  (1,124)  (1,598)  (4,214)  279  71  5  (222)  (4,316)  133  Impact of discontinued operations  1  101  130  7  1  204  1,854  423  239  2,482 Non-GAAP net income (loss)($1,752)($1,338)$811 $1,472 ($2,645)$2,335 ($790)($2,853)($807)($3,953) Net income (loss) attributable to non-controlling interests  352  254  335  1,294  152  652  (387)  (222)  2,235  195 Interest (income) expense, net  62  62  55  5  (29)  (5)  55  89  184  110 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 (benefit) - current $320 $161 $260 ($712) $261 $321 $66 $555 $29 $1,203 Impact of discontinued operations $72 $77 $80 $83 $81 $61 $132 ($37) $312 $237Core Consolidated EBITDA (excluding share-based compensation and unusual items)$3,885 $3,828 $4,392 $5,575 $3,032 $7,599 $4,305 $4,737 $17,680 $19,673                                            GAAP Net income (loss) per diluted share:$0.42 ($0.09)($0.08)$0.49 ($0.19)($0.17)$0.59 $0.40 $0.74 $0.63  Add back:                      Share-based compensation $0.02 $0.03 $0.03 $0.04 $0.05 $0.05 $0.05 $0.05 $0.12 $0.19  Amortization of intangibles $0.01 $0.01 $0.01 $0.01 $0.01 $0.04 $0.05 $0.05 $0.04 $0.16  Impairment related and other $0.00 $0.00 $0.01 $0.01 $0.00 $0.00 $0.02 $0.01 $0.02 $0.04  Other (income) loss, net ($0.68) ($0.04) $0.01 ($0.45) ($0.01) ($0.03) ($0.89) ($0.67) ($1.16) ($1.57)  Acquired businesses' deferred revenue $0.00 $0.00 $0.00 $0.00 $0.00 $0.07 $0.04 $0.03 $0.00 $0.14  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 (benefit) - deferred $0.07 ($0.03) ($0.04) ($0.12) $0.01 $0.00 $0.00 ($0.01) ($0.12) $0.00  Discontinued Operations $0.00 $0.00 $0.00 $0.00 $0.00 $0.01 $0.05 $0.01 $0.01 $0.07 Non-GAAP net income (loss) per diluted share($0.06)($0.04)$0.02 $0.04 ($0.07)$0.06 ($0.03)($0.09)($0.03)($0.11)                      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