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ICG Announces Third Quarter 2010 Financial Results

  • Core Consolidated Revenue Growth Increases 32% with Strong EBITDA Improvement


WAYNE, PA — (November 4, 2010) — Internet Capital Group, Inc. (Nasdaq: ICGE) (“ICG”) today reported its results for the quarter ended September 30, 2010.

Financial Results

ICG’s consolidated revenue increased to $30.2 million for the quarter ended September 30, 2010, up from $22.6 million for the third quarter of 2009.  Consolidated net income for the quarter ended September 30, 2010 was $1.8 million, or $0.05 per diluted share, compared to net income of $3.1 million, or $0.08 per diluted share, in the comparable 2009 period.  Results for the third quarters of both 2010 and 2009 included net gains, primarily related to sales of Blackboard stock, that are detailed below.

ICG’s corporate cash and cash equivalents were $70.7 million at September 30, 2010, and the value of ICG’s holdings in GoIndustry-DoveBid (LSE.AIM:GOI) was $3.2 million.  Additionally, as of September 30, 2010, ICG had an income tax receivable of $6.3 million.

“We are pleased that our core consolidated companies reported very strong results for the third quarter, performing right in line with our expectations,” said Walter Buckley, ICG's Chief Executive Officer. “Customer signings at InvestorForce, GovDelivery and, most notably, ICG Commerce resulted in excellent revenue growth this quarter and position us well for 2011.” 
  
The non-GAAP information presented below is useful to investors because it provides information with respect to comparable ongoing operating results of ICG’s three core consolidated companies, GovDelivery, InvestorForce and ICG Commerce.  GovDelivery sold its GovDocs subsidiary in the third quarter of 2010.  Accordingly, GovDocs is treated as a discontinued operation in ICG’s consolidated GAAP results presented above and is excluded from the aggregate core consolidated information.  Aggregate Revenue of our three consolidated companies grew to $30.6 million in the third quarter of 2010, an increase of 32% from the third quarter of 2009.  Aggregate EBITDA of these companies for the third quarter of 2010 was $4.1 million, compared to $1.5 million for the corresponding 2009 period.  Excluding the impact of stock-based compensation and unusual items, Aggregate EBITDA of the core consolidated companies was $4.5 million for the third quarter, compared to $1.6 million in the corresponding 2009 period. 


ICG Commerce

ICG Commerce reported $26.3 million of revenue for the third quarter of 2010, representing an increase of 28% over the comparable 2009 quarter. ICG Commerce’s EBITDA, excluding stock-based compensation and other unusual items, for the quarter ended September 30, 2010 increased to $5.4 million from $2.7 million in the comparable 2009 quarter. 

ICG Commerce continues to see strong growth as companies search for new forms of cost reductions to fund growth. The following are highlights of the company’s activity during the third quarter:

• significant new customer signings, including four multi-year, multi-million dollar contracts with Fortune 1000 clients, that contributed over $87 million in total contract value;
• expanded relationships with three existing clients, including Hertz and Pinnacle Foods; and
• recognition as the only procurement provider to make The Black Book of Outsourcing as one of the top 50 global outsourcing providers.

Outlook

The Company’s full-year 2010 guidance, after taking into account the sale of the GovDocs subsidiary, is core consolidated revenue between $112.0 million and $118.0 million and core consolidated EBITDA, excluding the impact of stock-based compensation and unusual items, between $12.0 million and $15.0 million. ICG expects core consolidated revenue and EBITDA for the full year of 2010 to be at the high end of this guidance range.

Information related to ICG’s core equity companies, Channel Intelligence, Freeborders, Metastorm, StarCite and WhiteFence, along with a reconciliation to GAAP results, is set forth in the Supplemental Information section of this press release.

Online versions of Q3 2010 (pdf):

Please see ICG’s website at www.icg.com for more information on ICG, its partner companies and third quarter 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 third 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 866-730-5763.  The international dial-in number is 857-350-1587.  The passcode is 46993003.

For those unable to participate in the conference call, a replay will be available from November 4, 2010 at 1:00 p.m. ET until November 11, 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 62879142.  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 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.

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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 and our partner 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.