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 $60.5 million of cash
- Acquired 96% ownership in MSDSonline, ICG's recurring revenue compliance platform
- Increased ownership in SeaPass to 53%, bringing SeaPass into ICG's group of consolidated companies as ICG's recurring revenue insurance platform
- Invested substantially in sales and marketing, driving record bookings at Procurian, GovDelivery and MSDSonline and resulting in a strong recurring revenue base going into 2013
- Re-branded Procurian to capitalize on its unique, industry-leading value proposition
- Acquired Media IQ and UAI, accretive tuck-in acquisitions, strengthening Procurian's industry-leading marketing and energy practices
- Completed tender offer for Procurian shares, which increased ICG's ownership in Procurian to 85%
- Expanded globally, winning an entry global account at Procurian, establishing European sales team in the UK and opening Procurian delivery centers in Buenos Aires and Shanghai
Investor Force and Channel Intelligence are both presented within discontinued operations for all periods presented. To aid the guidance comparisons, we provide the following reconciliation ($s in millions):
|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)||—|
|Core consolidated EBITDA||$4.7||$5.6||$19.7||$17.7|
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, dial 888-286-8010 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)|
|Three Months Ended||12 Months Ended|
|December 31,||December 31,|
|Revenue||$ 43,584||$ 34,435||$ 166,593||$ 133,437|
|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|
|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|
|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|
|December 31,||December 31,|
|Cash and cash equivalents||$ 45,526||$ 121,871|
|Accounts receivable, net||47,315||30,384|
|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|
|Fixed assets, net||13,781||5,682|
|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|
|Accrued compensation and benefits||19,658||11,737|
|Liabilities of discontinued operations||10,894||3,329|
|Total current liabilities||70,276||39,009|
|Other non-current liabilities||5,853||2,255|
|Redeemable noncontrolling interest||3,505||1,378|
|Controlling (ICG) equity||265,668||245,884|
|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)|
|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|
|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|
|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|
|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|
|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||$237|
|Core 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|
|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|
|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|
|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:|
|Shares used in calcuation of non-GAAP net income (loss) per share attributable to ICG:|
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.
- 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) (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.
- 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'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