Internet Capital Group Announces 2009 Fourth Quarter And Year-End Financial Results

ICG Reports Consolidated GAAP Revenue Growth of 27% in 2009, Core Companies Report Strong Aggregate EBITDA

Wayne, PA – February 25, 2010 – Internet Capital Group, Inc. (Nasdaq: ICGE) today reported its results for the fourth quarter and full year ended December 31, 2009.

GAAP Results:

ICG’s fourth quarter consolidated revenue was $24.0 million, an increase of 17% over the comparable 2008 period. Consolidated net income for the quarter was $32.0 million, or $0.87 per diluted share, compared to a net loss of $(26.6) million, or $(0.71) per diluted share, in the comparable 2008 period. Consolidated revenue for the year ended December 31, 2009 was $90.3 million, an increase of 27% over the prior year. Consolidated net income for the year ended December 31, 2009 was $15.5 million, or $0.42 per diluted share, compared to a net loss of $(22.9) million, or $(0.60) per diluted share, for the prior year. Results for all periods include net gains and charges, which are detailed below.

Core Results:

Set forth below is aggregate information relating to the following eight core companies: Channel Intelligence, Freeborders, GovDelivery, ICG Commerce, Investor Force,Metastorm, StarCite and WhiteFence. On December 31, 2009, ICG acquired an 89.4% ownership stake in GovDelivery. To aid in the comparability of the aggregate core company information, ICG is presenting this aggregate core company information assuming the GovDelivery acquisition occurred on January 1, 2008 by including GovDelivery’s historical results for all periods presented. This aggregate information presented below represents the sum total of the individual GAAP results of each of these companies.

Aggregate Revenue of ICG’s eight core companies increased to $72.8 million in the fourth quarter, an increase of 4% over the comparable 2008 period. Aggregate EBITDA for the quarter improved to $6.4 million, compared to $(1.0) million in the corresponding 2008 period. Excluding the impact of stock-based compensation and unusual items, Aggregate EBITDA was $6.7 million, compared to $3.9 million in the corresponding 2008 period.

For full year 2009, Aggregate Revenue of ICG’s eight core companies grew to $279.2 million, an increase of 6% over the prior year. Aggregate EBITDA in 2009 improved to $5.9 million, compared to $(26.4) million in the prior year. Excluding the impact of stock-based compensation and unusual items, Aggregate EBITDA in 2009 was $13.2 million, compared to $(10.2) million in the prior year.

“We are very pleased with the continued growth in our consolidated revenue and the strong aggregate EBITDA our partner companies reported in 2009,” said Walter Buckley, ICG's Chief Executive Officer. “In the coming year, we will maintain our focus on driving partner company revenue and EBITDA. Going forward, we will execute against our acquisition strategy of taking controlling stakes in new partner companies while opportunistically refining our existing group of companies. As we accomplish these goals, we expect to provide greater transparency and improve access to cash flow, resulting in substantial long-term shareholder value.”

Additional Financial Highlights from the Fourth Quarter and Full Year 2009

    * ICG acquired an 89.4% stake in GovDelivery and a 26% interest in SeaPass Solutions, a new, non-core partner company. We deployed total capital of $34.7 million in the quarter, primarily for these acquisitions.
    * ICG Commerce’s reported revenue grew to $22.7 million in the fourth quarter and $81.5 million for the year ended December 31, 2009, increases of 30% and 28%, respectively, over the comparable 2008 periods. ICG Commmerce’sEBITDA, excluding the impact of stock-based compensation and unusual items, was $4.9 million in the fourth quarter and $13.4 million for the year ended December 31, 2009, up from $3.1 million and $7.6 million, respectively, in the comparable 2008 periods.
    * Metastorm’s reported revenue of $17.1 million in the fourth quarter and $67.7 million for the year ended December 31, 2009, decreasedfrom the comparable 2008 periods. The decline in revenue was primarily due to the deferral of revenue associated with several fourth quarter bookings, which will be recognized as revenue in 2010. Metastorm’s bookings in the fourth quarter of 2009 were $19.5 million, representing a slight decline from $19.9 million in the comparable 2008 period. EBITDA, excluding the impact of stock-based compensation and unusual items, of $1.0 million in the fourth quarter and $1.8 million for the year ended December 31, 2009 were significant improvements over the comparable 2008 periods.
    * ICG’s consolidated cash and cash equivalents totaled $55.5 million at December 31, 2009; this primarily includes $29.4 million at ICG Corporate and $23.0 million at ICG Commerce. Additionally, ICG Corporate had an income tax receivable of $11.1 million at December 31, 2009. Marketable securities were $73.0 million at December 31, 2009, including the value of related hedges. Additionally, the value of ICG’s holdings in GoIndustryDoveBid (LSE.AIM:GOI) was $5.9 million at December 31, 2009.

Guidance for the Full Year 2010

In keeping with our strategic shift towards acquiring controlling stakes in companies, we are issuing the following guidance on the results of our consolidated core companies:

    * consolidated GAAP revenue in the range of $112.0 million to $118.0 million; and
    * consolidatedcore company EBITDA, excluding stock-based compensation and unusual items, in the range of $12.0 million to $15.0 million.

Online versions of Q4 and Year-end 2009 (pdf):

    * Internet Capital Group - Consolidated Statements of Operations
    * Internet Capital Group - Condensed Consolidated Balance Sheets
    * Internet Capital Group - Q4 Core Partner Company Information
    * Internet Capital Group - Year-to-date Core Partner Company Information
    * Internet Capital Group - Supplemental Information - Description of Terms

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 http://www.internetcapital.com/investorinfo-preswebcast.htm and click on the link for the fourth 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 866-730-5771. The international dial-in number is 857-350-1595. The passcode is 61138050.

For those unable to participate in the conference call, a replay will be available from February 25, 2010 at 1:00 p.m. ET until March 4, 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 70720049. The replay and slide presentation also can be accessed on the Internet Capital Group web site at http://www.internetcapital.com/investorinfo-preswebcast.htm.

About Internet Capital Group
Internet Capital Group (www.internetcapital.com) acquires and builds Internet software and services companies that drive business productivity and reduce transaction costs between firms. Founded in 1996, ICG devotes its expertise and capital to maximizing the success of these platform companies, which are delivering software and service applications to customers worldwide.

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 uncertainty of future performance of our partner companies, acquisitions or dispositions of interests in partner companies, the effect of economic conditions generally, capital spending by customers, the development of the e-commerce and information technology markets, and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those projected.

Contact:
Investor inquiries
Karen Greene
Internet Capital Group
610.727.6900
ir@internetcapital.com