Internet Capital Group

Press and Ideas

News Feed

ICG Announces First Quarter 2010 Financial Results

ICG Reports Core Consolidated Revenue Growth of 24%, Company Increases Ownership in ICG Commerce Subsequent to Quarter End


WAYNE, PA — (May 7, 2010) — Internet Capital Group, Inc. (Nasdaq: ICGE) (“ICG”) today reported its results for the quarter ended March 31, 2010.

GAAP Results

ICG’s consolidated revenue was $26.3 million for the quarter ended March 31, 2010, an increase from $21.7 million during the first quarter of 2009.  Consolidated net income for the quarter ended March 31, 2010 was $28.8 million, or $0.79 per diluted share, compared to a net loss of $(11.0) million, or $(0.30) per diluted share, in the comparable 2009 period.  Results for both periods include net gains and charges, which are detailed below.

ICG’s corporate cash and cash equivalents were $64.8 million at March 31, 2010.  At March 31, 2010, the value of ICG’s marketable securities was $34.8 million, including the value of related hedges, and the value of its holdings in GoIndustry-DoveBid (LSE.AIM:GOI) was $2.5 million.  Additionally, as of the end of the first quarter, ICG was entitled to an income tax receivable of $11.1 million.

“During the first quarter, we experienced solid revenue growth at our consolidated companies, which are on track to meet our 2010 operating goals,” said Walter Buckley, ICG's Chief Executive Officer.  “Additionally, as we announced yesterday, we are excited to increase our ownership in ICG Commerce, more closely aligning our companies and giving us a larger interest in our most profitable company.  We view this transaction as an important milestone in executing against our strategy and building significant value for ICG and its stockholders.”

Increased Ownership of ICG Commerce

In a separate release issued on May 6, 2010, ICG announced that it has acquired an additional 12% of ICG Commerce from a minority stockholder for $35.3 million in cash, increasing its ownership in ICG Commerce to approximately 76%.  ICG intends, as soon as practicable, to offer to buy the remaining approximately 5% of ICG Commerce from the holders thereof (excluding holders who are members of ICG Commerce management) at prices based on the same valuation.

Consistent with our strategy, this transaction provides ICG with a larger ownership stake in a strong, cash flow-generating company with a significant cash balance. It also more closely aligns ICG and ICG Commerce to focus on long-term value creation and provides ICG Commerce with greater flexibility to pursue potential acquisitions and other growth drivers.

Core Partner Company Results
  
Set forth below is aggregate information relating to ICG’s core partner companies.  This aggregate core company information is divided into two categories, core consolidated companies and core equity companies.  The core consolidated companies include GovDelivery, ICG Commerce and InvestorForce.  The core equity companies include Channel Intelligence, Freeborders, Metastorm, StarCite and WhiteFence.  The aggregate information presented below includes the sum total of the individual GAAP results of each company that is part of the applicable category.

Core Consolidated Company Results

Aggregate Revenue of ICG’s three core consolidated companies increased to $27.2 million in the first quarter, an increase of 24% over the first quarter of 2009.  Aggregate EBITDA of these companies for the quarter improved to $1.8 million, up from $1.5 million in the corresponding 2009 period.  Excluding the impact of stock-based compensation and unusual items, Aggregate EBITDA of our core consolidated companies was $2.0 million, compared to $1.7 million in the corresponding 2009 period. 

ICG Commerce, one of our core consolidated companies, grew its revenue to $22.9 million in the first quarter, an increase from $18.8 million during the first quarter of 2009.  ICG Commerce’s EBITDA, excluding the impact of stock-based compensation and unusual items, was $2.6 million in the first quarter, slightly below $2.8 million in the comparable 2009 period.  ICG Commerce’s cash and cash equivalents were $18.7 million at March 31, 2010.

Core Equity Company Results

Aggregate Revenue of ICG’s five core equity companies was $44.7 million in the first quarter, compared to $46.2 million during the first quarter of 2009.  Aggregate EBITDA of these companies for the quarter improved to a loss of $(0.6) million, compared to a loss of $(4.5) million in the corresponding 2009 period.  Excluding the impact of stock-based compensation and unusual items, the Aggregate EBITDA for the core equity companies was $0.1 million, compared to an Aggregate EBITDA loss of $(1.4) million in the corresponding 2009 period. 

Metastorm, one of ICG’s core equity companies, reported revenue of $17.7 million in the first quarter, compared to $16.8 million in the comparable 2009 period.  Metastorm’s EBITDA, excluding the impact of stock-based compensation and unusual items, was $0.4 million in the first quarter, compared to an EBITDA loss of $(1.5) million in the comparable 2009 period.

Online versions of Q1 2010 (pdf):

Please see ICG’s new website at www.icg.com for more information on ICG, its partner companies and today’s 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 first 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 at 866-277-1184.  The international dial-in number is 617-597-5360.  The passcode is 41137078.

For those unable to participate in the conference call, a replay will be available from May 7, 2010 at 1:00 p.m. ET until May 14, 2010 at 11:59 p.m. ET.  To access the replay, dial 888-286-8010 (domestic) or 617-801-6888 (international).  The pass code is 59256835.  The replay and slide presentation also can be accessed in the investor relations section of the ICG website at www.icg.com.

About ICG
ICG (Nasdaq:ICGE) identifies, capitalizes and grows companies in the SaaS/tech-enabled BPO and Internet marketing sectors.  These partner 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 successful businesses in the SaaS/tech-enabled BPO and Internet marketing sectors by providing them with access to management expertise and strategic and operational guidance, as well as growth capital.


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


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 partner companies’ customers, our partner companies’ ability to compete successfully against their respective competitors, our partner companies’ ability to timely and effectively respond to technological developments, 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, our ability to retain key personnel, 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.