ICG Announces Third Quarter Financial Results

WAYNE, PA — (November 3, 2011) — ICG Group, Inc. (Nasdaq: ICGE) (“ICG”) today reported its results for the quarter ended September 30, 2011.

“We are encouraged by the growth we have seen in customer pipelines and the fact that our companies continue to report solid EBITDA results,” said Walter Buckley, ICG’s Chief Executive Officer.  “However, delays in contract signings are impacting results for the second half of 2011.  As a result, we now expect our annual revenues to be in the range of $138 million to $140 million, compared to our original revenue guidance of $142 million to $148 million.  We are maintaining our original EBITDA guidance of annual EBITDA in the range of $16 million to $18 million.”

Buckley added, “As underscored by our stock repurchases during the third quarter, we remain optimistic about our companies’ opportunities and committed to our strategy.  We are confident that the strong value propositions of our companies, coupled with the strength of ICG’s financial position, will continue to drive growth at our companies and enhance value for our stockholders.”

GAAP Financial Results

ICG’s GAAP revenue increased to $35.1 million for the quarter ended September 30, 2011, up from $30.2 million in the comparable 2010 period.  GAAP net loss for the quarter ended September 30, 2011 was $(3.0) million, or $(0.08) per diluted share, compared to net income of $1.8 million, or $0.05 per diluted share, in the comparable 2010 period.  Results for both quarters include non-recurring gains and losses detailed later in this release. 

Under our share repurchase program, we repurchased 774,327 shares for $7.8 million in the third quarter of 2011, representing an average price of $10.17 per share.  To date, we have repurchased $20.6 million of shares under our $25 million repurchase program at an average price of $6.24 per share.

Core Consolidated Companies
 
Core consolidated revenue totaled $35.1 million for the third quarter of 2011, an increase of 15% from the corresponding 2010 period.  Core consolidated EBITDA totaled $4.4 million for the third quarter of 2011, as compared to $4.5 million for the corresponding 2010 period. 

Core consolidated revenue totaled $104.4 million for the nine months ended September 30, 2011, an increase of 24% from the corresponding 2010 period.  Core consolidated EBITDA totaled $12.1 million for the nine months ended September 30, 2011, as compared to $8.1 million for the corresponding 2010 period.

ICG Commerce reported $29.9 million of revenue for the third quarter of 2011, representing an increase of 14% over the comparable 2010 period.  ICG Commerce’s EBITDA, excluding stock-based compensation and unusual items, for the quarter ended September 30, 2011 was $5.4 million, consistent with the comparable 2010 period. During the quarter, ICG Commerce renewed a multi-year, multi-million dollar contract with Kimberly-Clark, solidifying one of its largest account relationships.   

Revenue grew 31% at GovDelivery and 3% at InvestorForce for the third quarter of 2011 compared to their respective 2010 periods. 

For information related to ICG’s core equity companies, Channel Intelligence, Freeborders, StarCite and WhiteFence, please refer to the supplemental schedule on our website, as well as the slide presentation that will accompany today’s earnings results webcast. See below for further details regarding the webcast.

Online versions of Q3 2011 (pdf):

• ICG - Consolidated Statement of Operations
• ICG - Condensed Consolidated Balance Sheets
• ICG - Non-GAAP Reconciliation
• ICG - Supplemental Information

Please see ICG’s website at www.icg.com for more information on ICG, its companies and its third quarter 2011 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 800-901-5231.  The international dial-in number is 617-786-2961.  The pass code is 81957221.  For those unable to participate in the conference call, a replay will be available from November 3, 2011 at 1:00 p.m. ET until November 10, 2011 at 11:59 p.m. ET.  To access the replay, dial 888-286-8010 (domestic) or 617-801-6888 (international).  The pass code is 21044114.  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 and tech-enabled BPO 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 successful businesses in the SaaS and tech-enabled BPO 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 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.